Australian rent prices flat in June as student crackdown eases stress: PropTrack
Rental price growth has slowed as challenging market conditions see more renters either struggling to afford record-high asking prices or looking to become property owners.
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Rental price growth has slowed amid a crackdown on international student numbers and as challenging market conditions see more renters either struggle to afford record-high asking prices or look to become property owners.
Data from PropTrack shows national rents were unchanged over the June quarter, at $600 a week, but had increased by 9.1 per cent, or $50, since June 2023. The increase in the past year is more than double the rate of inflation and household income growth.
Unchanged rents come as the national rental vacancy rate lifted to 1.4 per cent in June compared to 1.1 per cent in the March quarter.
While the rental market was tight by historical standards, PropTrack director economic research Cameron Kusher said signs of easing were encouraging for renters who had endured a challenging two-year period.
“While it is encouraging for people trying to rent it is still extremely tough,” he said. “We’ve got low vacancy rates, low supply of listings, and we’re still seeing quite strong demand for rental accommodation, so it’s still tricky for people looking for rentals.”
The rental market has been marred by record low vacancy rates and a shortage of new home builds at the same time that the population has risen by half a million people over the past year.
Mr Kusher said international students had been a big driver for rental price growth since the pandemic, and a crackdown was helping to ease the rental market.
“Student visa arrivals have been a big driver of the surging rental growth, because at least initially they are not going to be buying property, so a pullback in those numbers should help to ease demand for rental accommodation,” he said.
As part of a plan to halve net migration by 2025, the Labor government has cracked down on non-genuine students who use student visas as a back door for work and permanent residency, as well as introducing tougher conditions and stronger English tests.
PropTrack shows that rental prices in the combined capital cities was largely stable between June 2014 and June 2021 at between $400 and $450 a week, before increasing to $640 a week.
Mr Kusher said rents were stabilising as more renters were forced to trade down into small properties, share accommodation with other tenants or relocate to outer-ring pockets such as Blacktown in western Sydney or Logan in Queensland instead of suburbs closer to the centre of Brisbane.
“In this market you would think rents would still be rising very quickly, but it is not because people just can’t afford the rents that people are asking for any more,” he said.
“Areas like Blacktown or Sydney’s southwest are much stronger than, say, the inner west, where you would think people want to rent. That’s because people are having to move to less desirable areas to rent because they can’t afford to rent where they would prefer to.”
The median days a rental property spent on realestate.com.au in the June quarter was 21 days, up from 18 days in the previous quarter. However, this is down from the five-year median to June 2024 of 25 days, reflecting tight rental conditions.
Inquiries per listing eased as properties nationally received 21.8 inquiries on average in June, down from 28.9 in March 2024 and 22.9 in June 2023.
Mr Kusher said he expected that the rental market would remain difficult for the coming six to 12 months despite an expected further easing in stock tightness.
“We’ll probably see a bit more of a slowdown in rental price increases, but we’re going to continue to see rents growing well above the rate of inflation, just because we’re not getting that surge in additional stock,” he said.
Tough rental conditions appear to be encouraging renters to buy property, as first homebuyer loans over the year to May increased 6.2 per cent.
Rent was among the most significant contributors to inflation in the March quarter, according to the Australian Bureau of Statistics, with the sector recording its largest annual growth since 2009 of 7.8 per cent annually.
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Originally published as Australian rent prices flat in June as student crackdown eases stress: PropTrack
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