CoreLogic’s latest rental data showed that rents nationally soared by 8.7% in the year to March 2022, with almost every market experiencing strong growth:
Strong rental growth across Australia.
The explosion in rents follows Australia’s rental vacancy falling to its lowest level in 16 years, according to SQM Research:
Lowest rental vacancy rate in 16 years.
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The collapse in rental vacancies has been driven by the pandemic-induced shrinkage in average household size with people demanding more space, which has effectively reduced the number of dwellings available to rent.
Cameron Kusher, Director of Economic Research at PropTrack, believes rents will continue to rise at a swift pace as immigration is rebooted:
As lockdowns have ended and domestic and international borders have re-opened, interest in rental properties in inner-city areas – especially those close to universities, particularly within Sydney and Melbourne – has skyrocketed…
Rental supply in these markets remains elevated compared to pre-pandemic levels but is now declining quite rapidly…
Across each of the seven regions analysed here, rental demand per listing softened initially during lockdowns, but it has been consistently escalating of late, culminating in each of the seven regions seeing demand per listing reach an historic high in March.
Each of the seven regions analysed are among the top 10 SA4 regions nationally for increases in rental demand over the past 12 months…
Rental supply continues to reduce while demand climbs rapidly, particularly in inner city areas…
With international and domestic borders now re-opened, we have seen overseas arrivals begin to pick-up pace…
I would expect that over the coming months, inner-city pockets in Sydney and Melbourne will see rental prices continue to climb, supply continue to reduce, days on site dwindle, and demand remain heightened.
For tenants, it is going to become more difficult to secure properties – and the cost of renting looks set to increase further in large parts of our biggest cities.
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Sadly, the planned ‘Big Australia’ immigration reboot will add more pressure to our already tight rental market, deepening Australia’s rental crisis.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
