National rental prices rise in slowest pace in four years
Aussies are finally breathing a sigh of relief after new data has shown a major freeze in an area no one saw coming.
Rents in Sydney and Melbourne have been put on freeze for the past six months while national rents have inched up at the slowest pace in three years.
In what will be welcome news for struggling tenants, the latest REA Group Market Insight released Thursday showed Sydney and Melbourne’s median weekly rent has stagnated, with no growth over the previous two quarters.
Sydney’s median rent has stayed at $730 per week, while Melbourne’s is at $570 per week.
The rental freeze comes off the back of huge national rent increases in 2023 and early 2024.
The report found that Sydney rental prices grew by 4.3 per cent over the year to December 2024, down from a 16.7 per cent increase over 2023. Melbourne growth was 3.6 per cent over the year.
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Nationally prices grew at the slowest rate since late 2021, rising by 6.9 per cent year on year.
PropTrack senior economist Paul Ryan said rental demand was starting to moderate.
“We are starting to see balance come back to the rental market,” Mr Ryan said.
“Renters have had a very tough time over the last few years and rents are at a very high level as a result of that.
“(But) while there is a lot of demand, landlords are now having to be realistic relative to people’s income.”
Elevated rates of investor activity and rentals on the market taking longer to lease out were contributing to decreased pressure on the rental market, Mr Ryan added.
While pressure on renters was easing, Sydney’s prices were still far beyond the rest of the nation’s capital cities.
“Anyone looking for a rental now is still devoting a large portion of their income on servicing rent,” Mr Ryan said.
He added that rent increases were likely to occur in January and February, a naturally busy period with new leases for university students and people moving for new jobs in the new year.
Mr Ryan expected the trend of moderate growth would continue after the seasonably busy period ended.
Aside from Hobart, where a median rental is now $520 per week, Melbourne continues to be the most affordable capital city market to rent in.
“Melbourne is seeing the benefits of a stronger than average housing construction across the city that’s been keeping prices lower than other markets,” Mr Ryan said.
The ACT had similarly benefited from new builds keeping rents relatively still throughout the year at $620 per week.
“Brisbane continues to be a really hot housing market, lots of people are still moving to Brisbane that’s showing in both house prices and rental increases,” Mr Ryan said.
Brisbane’s prices were sitting at a median of $630, a 5 per cent increase in the past year.
“Similarly to Brisbane there is a lot of demand with people moving to Adelaide for space, lifestyle and affordability reasons. But decreasingly so, as prices have lifted so it is beginning to limit the appeal from an affordability standpoint.”
Adelaide’s prices had jumped 7.4 per cent over the year, but had also stayed stagnant in the previous quarter at $580.
The biggest capital city yearly increase occurred in Perth, a market that has seen an influx of popularity due to its previously affordable market, according to Mr Ryan. Perth’s prices had increased 8.3 per cent over the year and was sitting at $650.
Like Brisbane and Adelaide, affordability has been a key population driver to Perth, with slower home building pushing rental prices up.
Originally published as National rental prices rise in slowest pace in four years