Capital city rents drop in shock housing shift

Landlords have taken an unexpected step across multiple city areas in a sign that the rental crisis could finally be easing.

Australia’s rental crisis could finally be easing after nearly two years of explosive rises in rents and long lines of tenants queuing up for open homes.

Figures released Thursday revealed growth in rents was slowing across most of the country and there were now even major city areas where landlords cut their prices over the past three months.

The biggest falls were recorded in Sydney, Melbourne and Brisbane, while there were also regional areas in NSW, Victoria and Western Australia where tenants got some relief.

National rents grew by an average of 1.7 per cent over the September quarter and are now up 7 per cent year-on-year, according to the PropTrack Market Insights research.

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Long lines of renters had been the norm at open for inspections earlier this year. Picture: Adam Yip

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PropTrack noted that this was the “weakest annual rental growth since September 2021”.

It was also nearly half the rate of growth recorded over the year leading up to spring 2023. Rents had grown by nearly 20 per cent over 2022.

Experts said the slowdown could be attributed to a mix of forces, including a drop in tenant demand as more renters banded together in share houses to save money.

Previous rental increases also encouraged more tenants who had been considering buying a property to finally pull the trigger on their first home purchase.

An increase in vacancies had the added effect of giving tenants more choice – although the supply of rental homes still remains near record lows in much of the country.

PropTrack director of economic research Cameron Kusher said there were some positives for renters who have endured some of the most extreme conditions ever recorded over recent years.

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Prospective tenants were having difficulties securing rentals. Picture: Jeremy Piper

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“While the cost of renting remains higher than a year ago, the pace of price growth has slowed,” he said. “This reflects an easing of rental market pressures, which we expect to continue.”

He added that part of the reason rents were winding back was simply because they had passed the point where tenants could afford them.

“With more stock available for rent, and the cost of renting rising at a pace above inflation over recent years, the capacity to pay rent is now impacting demand,” he said.

Improvements would likely continue, Mr Kusher said. “We anticipate more balanced conditions in the coming months.”

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PropTrack’s Cameron Kusher said conditions would continue to ease.

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SQM Research director Louis Christopher said rental conditions remained extremely challenging but it was likely Australia had passed the worst of the rental crisis.

“Overall, the national rental market remains in severe shortage … (but) the days of 10-20 per cent plus annual rental increases have come to an end,” he said.

Among the biggest falls in rent was recorded in Ryde, in Sydney’s northwest, where the median cost of rent dropped from $725 per week to $700.

Advertised rents across Sydney’s northern beaches dropped by about $20 a week. This would deliver tenants an average saving of about $1040 across a year.

The price of rental homes in the Melbourne CBD dropped from an average of $620 to $600 per week.

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Melbourne rents are now the cheapest among mainland capitals. Picture: Gaye Gerard

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Melbourne as a whole also became the cheapest mainland capital in the country, with weekly rents averaging about $570.

Rent falls were also recorded in Sydney’s Sutherland Shire, the Brisbane CBD and the Murray region of NSW, home to cities like Albury-Wodonga.

There were also plenty of areas where rents were put on ice – something rarely seen since international borders were reopened following the Covid-era lockdowns.

Major regions where rents remained unchanged over the quarter included the Perth CBD, the Sunshine Coast, Sydney’s eastern suburbs, Adelaide-North and Melbourne’s inner south, among others.

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