Property rents collapse at unprecedented rate

The Australian Bureau of Statistics (ABS) yesterday released data showing that capital city residential property rents fell another 0.2% over the September quarter, which follows the 1.3% decline recorded in the June quarter:

Over the year, Australian capital city rents fell by a record 1.4%:

The below charts plot residential rental growth across the various capital cities:

Quarterly rental growth was negative everywhere except Canberra over the September quarter, whereas all capitals except Adelaide, Hobart and Canberra recorded falling rents over the year.

In particular, Perth and Darwin have recorded falling rents for around six consecutive years, down 23.2% and 27.6% respectively from their peaks.

In real inflation adjusted terms, rents across the combined capital cities fell by 1.7% over the September quarter and by 2.1% year-on-year:

As shown above, all capitals recorded falling real rents over the September quarter, whereas over the year all capitals but Hobart and Canberra recorded rental falls.

The outlook for rents nationally remains poor given the forecast sharp fall in population growth due to collapsing immigration.

As noted in my recent report, even if dwelling construction falls gradually to cyclical lows (125,900 a year in 2023), Australia will face a whopping supply glut of 155,000 net dwelling additions versus 56,000 population increase in 2021 and 141,000 net dwelling additions versus 98,000 population increase in 2022:

The situation is worst in NSW and Victoria, which are the key landing points for migrants.

NSW is facing huge supply glut with 42,000 net dwelling additions versus a 2,000 population decline in 2021 and 34,000 net dwelling additions versus 7,000 population increase in 2022:

Victoria also faces an enormous supply glut with 51,000 net dwelling additions versus 13,000 population growth in 2021 and 48,000 net dwelling additions versus 30,000 population increase in 2022:

This data points to further rental falls across NSW and Victoria, at least for the next two years.

Unconventional Economist
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  1. Isn’t it amazing, Corelogic and REIWA have been running the line here that rents have been rising! I’ll have to bookmark this page.

    Don’t trust CL and think their auction stats that don’t include unreported auctions are crap.

    • Hey, leave CoreLogic alone. They’re just trying to make an honest buck in a tough environment. 🙂

    • This might be the first time ever I believe REIWA stats. Perth property demand anecdotally appears strong- after 13 years it might be due for a bounce. ABS are hardly an accurate source either!
      Also existing tenancies are blocked from rent increases for another 6 months so rent changes are restrained.

  2. Evictions are banned in Melbourne, so why didn’t rents fall 100%? Who would still pay rent in these circumstances?

    • Mortgage holidays allow some to defer payment. Not paying rent for a year would saddle a person with an impossible debt. When they need to start repayments I expect personal bankruptcy will be the only option.

      • Jumping jack flash

        “Not paying rent for a year would saddle a person with an impossible debt”

        if you mean that renters would use the rent money to obtain debt with, then you are correct. Debt is as essential as breathing in the New Economy. Once rents come back online and they need to service the new debt PLUS pay the rent, then catastrophe.

        The government would probably step in though. If enough people can’t pay their debt then the banks howl and the government listens to them. The government doesn’t give a toss about their people who have the debt though.

  3. pfh007.comMEMBER

    1.4% decline over a year?

    During a pandemic which has sealed the borders tight?

    A collapse?

    More like it is an excellent demonstration of how tight residential vacancy rates do an excellent job of supporting rents.

    We need to build more housing that people want to live in until residential vacancy rates are at least 4-5% nationwide.

    Until then the use of words like glut are unwarranted and raise false hope.

    • More like fake numbers
      This number includes all rents not only new contracts.
      Also knowing how dodgy ABC CPI is they probably included some dodgy replacement method making rentbrise 0% if someone moved from 2bdr unit to 3bdr house for the same weekly rent.
      Look at sydney … rents are down 20% in some areas, 10% in many other suburbs, few % in the others, no place has seen rent rise and at the end according to ABS rents are down only 3%
      In a non-fairytale world rents in Sydney are down well over 10% on average

      • pfh007.comMEMBER


        Perhaps they are fake and are hiding larger rent declines but that doesn’t explain why MB are calling the reported figures a collapse.

        Plus the low residential vacancy rates in many areas where people want to livevsupport the idea that rents have not collapsed.

        Several staff have reported difficulty finding rentals outside of the high rise slums.

        So I doubt those figures are fake as the residential vacancy rates do show higher vacancies in slums and lower vacancies where people want to live.

        • You dont need ABS to tell you …
          Go to pick a nice suburb, filter houses and sort by date and see (keep in mind that these are asking rents that now rarely materialize and more often go for offers lower by 5% or 10%)
          In sydney, even in the most desirable lowest vacancy rate house only suburbs 5% down is a rule. In many suburbs 20% down for houses is also common. Units are off the book.
          If you find something that goes for more than in last year or two check photos and in 95% of cases it has been renovated

          Also notice how those with prices close to last years are listed for months …

          • pfh007.comMEMBER

            Assuming your research is correct and a modest increase in vacancy rates in Sydney to approx 3.4% is producing good results on rents (if not prices) a national vacancy rate of 5% will provide excellent downward pressure on rents and prices.


            Perth showed the benefits of elevated vacancy rates (circa 5%) for an extended period. Those high rates were reported by industry outfits like SQM which is why I have doubts about the claims of fake data.

            In the end we both want the same thing. Plenty of downward pressure on rents and prices.

            I am just warning against announcing victory too quickly.

            I have seen these victory stories evaporate like the morning dew.

        • darkasthunderMEMBER

          If you live in an apartment within a 10km radius of downtown Sydney rent is 12-15% lower than a year ago. Where I live on the lower north shore (not near a Uni) $575 is the new $650. Best 1 bedders in a modern building near me used to be $600 now on for $500.

      • Mike Herman TroutMEMBER

        I can add that bayside Melbourne apartments/townhouses ie. Brighton, Sandringham, hampton, black rock about 3 to 5% down…

        • Elsternwick also seems down
          – two places near us that I checked out closely 6-7 years ago for elderly relatives.
          – both been cleaned up( new paint, some fittings, florcoverings etc.)
          Both now up for rent, at 20% and 25% discount to previous search 6 years ago.
          And both been vacant for several months at least.

  4. reusachtigeMEMBER

    1.4%… collapse… oh noes!

    Now try renting an actual house within 15km of the Sydney CBD!

    • Yup, my lived experience says the rental market where I live/want to live is as tight as ever (Syd).
      I’m with Pfh until the numbers get to a fall of 5%+ and vacancy rates of higher, a glut it is not!

  5. my toranaMEMBER

    I live on beautiful street in my rented home but there is a background noise of a generator and air con system running 24/7. I have to sleep with my window shut or wear noise canceling headphones to sleep with fresh air. The noise pollution section of the act government has officers who clearly never leave the office on a mission. Thank you private sector property development and your fulsome political mates for the great living standards of Australia.

    • Sounds you need a better public service near you – the fact they never leave their office and do their actual job is no one else’s fault. However, I wouldn’t hold your breath: I have a mate who is pretty senior in state gubmint here in QLD and he was saying that an attempt to get 50% of the staff back into the office has failed miserably. On the floor which he works the numbers are more like 10-25%, depending on the day, as employees refuse to “risk their lives” by coming back to to work. The longer their extended holiday goes on the more permanent it will become, methinks, so if you thought the service was wanting before Covid, you ain’t seen nothing yet ..

  6. Display NameMEMBER

    Tracking rentals available in Petersham and Stanmore in Sydney. Just broke through 1300 last night for first time. 750 pre covid.

  7. Rents collapse, that’s not a knife
    This is a knife, Down down 900 points, before the election
    watch the Asx collapse today
    Robin Hooders just met Friar Tuck,

    • I can’t say I feel an iota of sympathy for the Robin Hooders. I hope they loose it all.

      They’re people fighting to get INTO a burning building.

      • Ever seen a good Kelpie at work?
        they can run on the backs of sheep as if it were solid ground
        Wolves have learned that tactic.
        Took a while, but we are now expert.

  8. BoomToBustMEMBER

    For Melbourne if you take out the dogbox apartments and re-calculate the rates I think you’ll find they are going up. People are abandoning apartments and moving to the burbs.