Grim warning to Aussie renters as record rise set to increase

A record rise in an essential cost has been followed by a dark warning that things will only get worse.

Australia has witnessed the fasted quarterly rise in rental prices on record, with experts warning things aren’t set to get better any time soon amid the rising cost of living.

Median weekly advertised rents have increased by a historic high of 4.3 per cent over the September quarter, bringing the year-on-year rise to 10.3 per cent, also the highest on record according to the latest PropTrack Market Insight report.

The latest data means Australia is now experiencing the “tightest rental market we’ve ever seen” according to PropTrack director of economic research and report author Cameron Kusher.

“It’s a big challenge for renters and ultimately impacts low-income workers and essential workers the most,” he said.

The median weekly cost of renting a home has jumped by over 10 per cent in the past year.

Australia’s median weekly rent now sits at $520 for houses and $460 for units, jumping to $640 for a home in Sydney.

The tight rental market is set to become even worse as migration to Australia lifts in the coming months, according to Mr Kusher, with the effects of this to be most acute in inner-city suburbs.

“A lot of people who come to study and work will rent an apartment in a city location,” Mr Kusher said.

“It’s something we haven’t dealt with in the past few years because no one has been coming into the country, adding to competition in the rental space.”

More people are wanting to move back to the city after the pandemic. Picture: NCA NewsWire / David Crosling

The record rent rise is not surprising according to Australian Council of Social Services deputy chief executive officer Jacqueline Phillips.

“This aligns with findings of a recent ACOSS survey of people on income support, which found nearly all those in the private rental market were in housing stress; people are living in tents and cars and many are fearful they will end up homeless as they don’t know how they’ll pay the rent,” she said.

There are grave concerns for the people who fall through the cracks when rents increase. Picture: NCA NewsWire / Luis Enrique Ascui

“People are already skipping meals and medicine in order to get by.”

Migration into Australia is not the only reason rents are increasing in our major cities, as many Australians are returning to the inner suburbs after the pandemic.

“The impetus to be in a house is not as strong as it was in the pandemic,” Mr Kusher said.

The demand for apartment living has gone up as Covid-19 rules have eased. Picture: Lisa Maree Williams / Getty Images

“As the cost of living rises, people will shift back to renting apartments.”

That’s something which mirrors what the Tenants Union has been seeing, according to CEO Leo Patterson Ross.

“As well as international students, there also seems to be an increasing number of people coming back to the city,” he said.

Australia’s median weekly rent now sits at $520 for houses and $460 for units, jumping to $640 for a home in Sydney.

“But we‘ve had this issue for a long time … there’s always not been enough homes for the number of people living [in the city].”

This is what the rental market now looks like in each state:

NEW SOUTH WALES

Famed for its record-high house prices, Sydney has once again seen a huge jump in rents.

The median rental cost in Sydney sits at $640 per week for a home and $520 for a unit.

In just a year, the cost of renting a home has jumped by 12.3 per cent, with unit costs rising by a lower rate of 8.3 per cent.

Australians are being warned to prepare for their rent to go up. Picture: NCA NewsWire / Gaye Gerard

Weekly rental costs have not increased for this quarter for regional NSW, as more people move back to the cities, but the cost of renting a home is still 11.1 per cent higher than it was last year, now sitting at $500 per week.

VICTORIA

Victorians enjoy considerably lower median rental costs than other capital cities, with the average home’s weekly cost sitting at $640 for a house and $420 for an apartment.

The price of renting a home in Melbourne has not increased in the past quarter, however, the cost of renting a unit has increased by 5.0 per cent.

Demand for renting a home in inner city Melbourne and Sydney is returning to pre Covid-19 levels. Picture: Jake Nowakowski

QUEENSLAND

Brisbane has seen a considerable jump in the price of both houses and units, rising 16.7 per cent and 7.5 per cent in the past year respectively.

The cost of a house has risen by 2.9 per cent to a median of $525 per week, and by 1.2 per cent to $430 per week for a unit in the past quarter.

Brisbane is now the fifth most expensive city in Australia in which to rent a home. Picture: Supplied

ACT

Canberrans still boast the highest weekly rent in the country, sitting at $690 per week for a home and $550 for a unit.

The capital hasn’t seen a huge jump since the past quarter, up 1.5 per cent and 1.9 per cent for houses and units respectively, but there’s still been an 11.3 per cent rise in weekly rents for homes in the past year.

WESTERN AUSTRALIA

Unlike the eastern states, Perth residents have not seen an increase in the cost of renting a unit in the past quarter.

However, the cost of living in a house in WA‘s capital now sits at $495, increasing by 3.1 per cent in the past quarter and 10.0 per cent in the past year.

The situation is even higher for homes outside of Perth, with the weekly rent cost increasing by a whopping 14.3 per cent in the past 12 months for regional houses, now sitting at $480.

SOUTH AUSTRALIA

Those living in South Australia’s regions are residing in one of the only places in the country where the cost of renting has actually fallen.

It now costs an average of $235 per week to rent a unit outside of Adelaide, down 6.0 per cent in the past quarter.

For a house, the median weekly rent is now the lowest in the country at $320 a week, down 3.0 per cent in the past quarter.

The story isn‘t so good for Adeladians, with prices up 4.3 per cent for houses and 2.6 per cent for units in the past quarter.

Originally published as Grim warning to Aussie renters as record rise set to increase