Australian rental market worst in 13 years, new report finds

Australia’s rental market is the worst it’s been in 13 years with renters forced to pay more as demand skyrockets but housing supply dwindles.

Australia’s property market is hard enough to enter as a buyer but now new research shows that renting isn’t a great solution either.

A quarterly report released by property analysis firm CoreLogic on Wednesday found that rental prices are the worst they’ve been in 13 years.

National rental rates are 8.9 per cent higher compared to this time last year which is the highest annual growth Australia has experienced since July 2008.

Brisbane is the worst capital city to rent in, experiencing the strongest growth at 2.6 per cent, followed by Sydney at 2.3 per cent. And it’s not just big cities struggling under the pressure of increased demand and a shortage of stock.

Regional rental markets have been pummelled, rising 2.2 per cent over the September quarter compared to capital city dwelling rents, which increased 1.7 per cent over the same period.

Australia’s regions had the highest annual rental growth rate ever recorded since CoreLogic started measuring rental indexes in 2005, at 12.5 per cent as of this September.

In comparison, the combined capital cities recorded a yearly rent growth of 7.5 per cent – the biggest jump for the combined capitals since January 2009.

The quarterly and yearly rise in every major rental market. Source: CoreLogic

CoreLogic’s research director Tim Lawless warned that regional renters were feeling the sting of demand which was upping prices.

“Demographic data is showing a clear trend towards regional population growth, driven by a combination of more people leaving cities for the regions, but also fewer people moving from the regional areas to the capitals,” he said.

“With regional housing rents rising 12.5 per cent over the past year at a time when household incomes have hardly budged, it’s likely that rental affordability is becoming a lot more challenging in some of the most popular regional markets.”

News.com.au has previously reported on the regional rental crisis, with people being driven out of communities they had lived in for their whole life after being unable to find somewhere to stay.

The rolling quarterly change in rental values in houses. Source: CoreLogic.

The rolling quarterly change in rental values in units. Source: CoreLogic.

The strongest quarterly rental growth was recorded in Brisbaneat 2.6 per cent and over the last 12 months, rents are almost 10 per cent higher than the previous year in Queensland’s capital.

Last week, news.com.au reported on a Brisbane single mum with $28,000 in savings who has been homeless for a year, unable to find anywhere to live despite applying to 300 rental vacancies.

Perth, which recorded a surge in rental growth earlier in 2021, saw rates increase 0.3 per cent during the September quarter.

Rent changes. Source: CoreLogic

Adelaide remains Australia’s cheapest capital city for rentals, with typical dwelling rents of $440 per week.

That’s a stark difference to Canberra, which are the most expensive place to rent in the country, at $633 a week.

Melbourne, is Australia’s second more affordable rental market, with a typical dwelling costing $450 per week to rent, or just $9.30 a week more than it costs to rent in Adelaide.

Although rental growth has eased quarter on quarter, Mr Lawless expects rents nationally to rise in coming months. The bad news is, household incomes won’t rise at the same rate.

On average, renters were spending an average of 28.7 per cent of their income on rent.