- Rents Australia-wide have seen the sharpest surge on record, putting tenants under extreme pressure, report says.
- The Domain Rent Report for the December quarter found that house rents jumped 14.6% in 12 months.
- Rent for units increased even further by 17.6% across the combined capitals.
The Domain Rent Report for the December quarter found that house rents jumped 14.6% in 12 months, while units increased even further by 17.6% across the combined capitals.
Across the country, house rents jumped the most in Perth (15.2%) followed by Brisbane (14.6%). While rent increases were the smallest in Canberra (3%) and Darwin (5.1%).
For units, Melbourne rents surged a staggering 20% in 12 months, followed by Sydney at 18.6%, with Canberra again seeing the slowest growth at 5.7%.
Combined capital quarterly change in weekly asking rents
Vacancy rates critical
Domain’s Chief of Research and Economics, Dr Nicola Powell said rental vacancy rates are now reaching critical levels.
“Nationally, asking rents are at historic highs across all cities (apart from Darwin and units in Perth), rents are rising at the fastest annual pace ever seen across the combined capitals and the number of vacant rental properties is at an all-time low for the month of December,” Dr Powell said.
According to the report, the rental market has become extraordinarily tight with tourism, overseas migration and foreign students placing greater pressure on supply as demand increases. This continues to fuel the landlords’ market putting increased pressure on tenants in many parts of the country.
House and unit rents grew over the December quarter to new heights and saw their largest-ever annual increase across the combined capitals. This is the longest stretch of continuous rental price growth as house rents rise for the seventh consecutive quarter and unit rents for the sixth.
The highly competitive rental market
Frustrated would-be tenants are taking to social media to share #rentalcrisis stories of agents pushing up rents where they have multiple offers from applicants, and cancelling inspections.
For example, on Jan 10, journalism student Liam Murphy posted an image of the queue he was waiting in to inspect a small two bedroom unit in Perth’s Victoria Park, citing “around 100 people and a wait time of 20 minutes.”
Dr Powell said that during January, the busiest period in the rental calendar, tenants should find more options opening up with the seasonal changeover.
“Amid Australia’s cost of living crisis, we predict that units will be a popular option for those looking for a rental this year,” she said.
“Unit rents have been growing faster quarterly than houses in most capital cities, likely because affordability concerns continue to persist.
“Units in Bass Hill in Sydney’s South-West have seen a 44.2% annual rise in weekly asking rents. Likewise, units in Melbourne’s CBD have also jumped by 33.3% over the past year.
“This suggests that budget-conscious tenants are making the shift from houses to units to suit their current budgets while still being close to work, school and amenities.”
Government must step in
Cassandra Goldie, CEO of ACOSS, Australian Council of Social Service, national voice for people experiencing poverty and inequality and peak body for the community welfare sector took to Twitter to address the looming rental crisis, saying “About 25% private renters having lost income and eviction moratoriums ending. We could #endhomelessness for good if we act now.”
Cassandra Goldie stressed that in the face of inflated prices, income support payments were “woefully inadequate”, at well-below poverty levels.
“In the last twelve months, rents have risen by about 18 per cent, energy bills by about 20 per cent and food by about nine per cent. Rent assistance remains just $75.80 per week for a single adult,” she said.
“Even with 6.1 per cent indexation, Youth Allowance will increase to just $40.20 a day.
“There are more than three million people living in poverty in Australia and this Christmas one in five of us were struggling to afford food.
“As one of the wealthiest countries on Earth, it is unconscionable that we continue to refuse to end poverty, but will proceed with billions in tax cuts for the wealthiest who already have more than enough.
“The federal government must take action to change this by lifting income support payments to at least $73 a day in the May Budget.”
More homes needed
Domain’s Dr Powell said there are many factors that have driven the rental market to its current state and there is no quick fix to ease its highly competitive nature.
“The government’s commitment to building more housing is a great start, but we need to see further progress and a change in land use and planning rules to allow for more homes to be built in middle-ring suburbs,” she said.
“With the population increasing, rising investor activity is needed to assist with Australia’s limited rental market supply, advancements to the build-to-rent sector and more assistance from the government to help shift more tenants into home ownership.
“Investors should be encouraged to participate in social, community and affordable government housing programs.
“On top of that, seeing meaningful improvements in gross rental yields this quarter will hopefully encourage investor activity helping to address supply issues.”