- Australian tenants are shelling out thousands of dollars more in rent after a record-breaking 12 months.
- Rents have risen as much as 21% in some capital cities, and 11.3% across regional Australia.
- But lockdowns and closed borders mean apartments and inner city areas in Sydney and Melbourne are proving the exception.
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Renters are paying thousands of dollars more for their homes than they were just twelve months ago.
New CoreLogic data shows rents are rising faster than they have since 2009, with rents in regional Australia off the charts.
The median capital city rents has grown by 5% since last June, while regional areas have shot up by a whopping 11.3%.
Tenants in Darwin have been hit the hardest, paying around $5,000 more in rent per year than they were 12 months ago, after a 21.3% surge.
It ranks the Northern Territory capital as the third most expensive city to rent in. In that regard, Canberra retains its crown, with median rents sitting at $620 per week, followed by $582 in Sydney.
Perth rents jumped by more than 16%, with Adelaide, Brisbane, and Canberra all costing around 7% more than last year.
Coupled with record-low interest rates it means that for many, buying may actually prove to be the cheaper option.
Head of Australian research Eliza Owen attributed the rental boom to a lack of supply, exacerbated by government stimulus and bumper savings – the same factors driving house prices higher. But more than 12 months on from the pandemic being declared, momentum is starting to fade.
“It is interesting to note that, as with house prices, rent prices are seeing a deceleration in growth at the national level and across each of the capital cities,” Owen said. “This may reflect affordability constraints, but there could also be higher levels of rental supply as investor activity in the market increases.”
First home buyers may have been the ones diving into the market at the end of 2020, but more recently investors have begun to tip their toes. ABS data shows new investor loans grew by 13.3% in May.
While Melbourne was the only capital city market to decline, as rents fell 1.4% after four successive lockdowns, apartments in some major cities are still reeling.
“In Sydney and Melbourne, unit rents continue to show year on year decline, at 1.1% and 6.4% respectively,” Owen said.
“As noted in previous quarters, these cities, which have historically had the highest intake of international migrants, have seen rental demand most impacted by international border closures amid the pandemic. Although demand across these unit markets remains fairly subdued, there are signs that rents may be stabilising at lower levels.”
The recent lockdowns will bite in areas dependent on hard-hit industries like hospitality and tourism.
“These regions include the inner city market of Sydney, which has been one of the more subdued Sydney rental markets through the pandemic,” Owen said.
But as sale prices continue to tick up nationally, the new data suggests would-be buyers are finding little relief in any part of the housing market.