- Rent rises were recorded across 96.3% of unit suburbs.
- Nine in ten house suburbs recorded rent rises.
- The cash rate hikes have seen a 23.6% fall in new housing investment lending.
New data has rubbed salt into the wounds of Australian renters, with over nine in 10 suburbs across the nation recording rent rises. Not only have rents risen, Australia’s rental market saw many suburbs upping costs by double digits.
According to CoreLogic’s Mapping the Market, unit renters have faired the worst, with two-thirds of unit suburbs seeing an increase in rent of more than 10%, while only one-third of house suburbs have seen rents rise by double digits.
CoreLogic economist, Kaytlin Ezzy, said a shortage in rental listings has continued to place upward pressure on rents, with higher interest rates hurting supply.
“Investors tend to shy away from the housing market during negative economic shocks,” said Ezzy.
“The sharp rise in interest rates has coincided with a 23.6% fall in new housing investment lending between April 2022 and May this year, and this includes a slight recovery in investment lending in recent months, which has lifted 10% from a low in February this year.”
“On the demand side, record levels of overseas migrants, many of whom rent in inner-city unit precincts, has bolstered rental demand this year, causing an imbalance between rental demand and supply.”
Suburb market rent value increases
|Region||Suburbs analysed||Annual rent rise #||Annual rent rise %||Suburbs analysed||Annual rent rise #||Annual rent rise %|
Adelaide and Perth face tough conditions
Rental conditions are the tightest in Adelaide, Perth, and Regional Western Australia where 100% of both house and unit suburbs have experienced an increase in rents over the past 12 months.
The tight supply of rentals in Perth has been particularly challenging for tenants, who have experienced a 13.4% increase in rents over the past 12 months, and a 41.8% increase since March 2020.
“For Perth in particular, there is a persistent shortage of rentals, with total rent listings now about 50% lower than the historic five-year average.”
Kaytlin Ezzy, CoreLogic Economist
Across Brisbane, Adelaide, Perth, and Darwin, 100% of unit markets saw their rents increase in the past 12 months.
Just three markets in Sydney (Long Jetty -3.7%, Wyong -2.5% and The Entrance -0.03%), two markets in Melbourne (Rosebud West -2.3% and Hastings -0.5%) and one market in Hobart (Claremont -0.2%) saw unit rents fall.
Rental pressure eases in Canberra
Meanwhile, in Canberra, renters are finding some relief with 18 unit markets recording a decline in rents.
Canberra and Hobart are the only two capital cities where rent listings are currently substantially above the previous five-year average.
Across Canberra, there are currently almost 2,400 rental listings, compared with the historic five-year average of around 1,900, according to Ezzy.
Rents surge in Sydney
Despite a few minor declines in the city’s Central Coast region, Sydney units continued to record some of the strongest rental growth across the country.
Units in Sydney’s inner-city market of Haymarket recorded the highest annual rise, up 32.6% or $276 per week, followed by Georges Hall (31.3%) and Arncliffe (30.9%) in the city’s inner southwest, which are popular locations for immigrants and international students.
The biggest house rent increases were in the southwest of Sydney, in Campsie and Belfield, which have been seeing strong migration trends and benefiting from a number of nearby popular inner western suburbs.
While the inner southwest of Sydney, alongside Parramatta and the City and Inner South of Sydney, has also seen strong rental growth, driven by some of the highest net overseas migration figures for anywhere in the country.
There are also a number of WA outback mining towns that have seen rents surge in the past 12 months, led by locations around the Karratha area.
Ezzy said for those not supported in the housing market through mining employment, this has created great affordability challenges for longer-standing residents.