Source: Real Estate
Renters across Australia are still feeling the pinch, but there are promising signs ahead. Although rents remain high compared to last year, the pace of rental growth is easing. According to the latest PropTrack Market Insight report, the national median rent reached $610 per week in the September quarter, reflecting a 1.7% increase over the past three months. Year-on-year, rents have climbed by 7%, marking the slowest annual growth since September 2021. While challenges persist, this slowdown offers some relief for tenants.
Capital cities still lead the rental market, with median rents rising 1.6% to $640 per week, while regional rents increased 1.9% to $540. Year-on-year, capital city rents grew 6.8%, compared to an 8% rise in regional rents. Sydney remains the most expensive city to rent, with a median of $730 per week, while Melbourne's median rent has surprisingly dropped to $570, making it cheaper than all major capitals except Hobart.
In Melbourne, rental demand is declining as more tenants transition to homeownership. Many investment properties are being bought by first-time buyers, resulting in lower rental demand. Some tenants even find paying a mortgage to be cheaper, with differences as little as $30 per week compared to renting. Perth, with a median rent of $650, has seen the highest annual rent growth in the country at 12.1%. Despite this, real estate agents in Perth are seeing signs of the rental market cooling. Michael Coulson from Coulson & Co Real Estate reported that fewer tenants are attending inspections, and properties are taking longer to rent.
Annual growth in unit rents (9.1%) has outpaced house rents (6.9%), narrowing the gap to just $20 per week. This trend indicates that tenants are increasingly viewing apartments as a more affordable option. Interestingly, Hobart, regional NSW, and regional Tasmania are experiencing stronger rental growth compared to last year, bucking the national trend.
Australia's rental market remains expensive, and many tenants are struggling. However, the slowdown in rent growth and increased availability offer a glimmer of hope. As we approach the end of 2024, the days of rapid rent hikes may be slowing down, providing much-needed relief for renters across the country.
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