Rental prices to surge across Adelaide, South Australia, as demand outstrips supply

The cost of renting a home in dozens of South Australian suburbs and towns is tipped to rise by as much as $150 a week this year. Find out where rents will rise the most.

The cost of renting a home is about to reach new heights with a leading market expert predicting increases of around $6000 for some South Australians this year.

Propertyology head of research and Australian Real Estate Hall of Famer Simon Pressley said the state’s under-supply of rental accommodation was driving prices to record heights.

He predicts weekly rental increases of $150 a week for suburbs in Adelaide’s north and Whyalla while tenants in Port Lincoln should budget for an additional $130 a week.

Rental increases of $120 a week are also expected in Adelaide’s south and west, $110 a week in Mt Barker, $100 a week in Adelaide’s east, Mt Gambier and Port Pirie, $80 a week in Port Augusta and a comparably low $30 a week in Victor Harbor.

“Greater-Adelaide’s current population of 1.3 million only had 819 dwellings advertised for rent at the end of January,” Mr Pressley said.

“To put the horrendous under-supply of rental accommodation into perspective, at the same time five-years earlier there were 3375 dwellings advertised for rent for a population that was 40,000 people fewer.

“So generally speaking, an Adelaide tenant who looks to move should brace themselves for intense competition and the possibility of needing to pay about $6000 more rent in the 2022 calendar year compared to last year.”

Newlyweds Abhi and Urvi Bajaj have experienced rental stress first hand.

The couple recently secured an apartment in Somerton Park but only after a month of back-to-back inspections and many failed applications.

Mr Bajaj said the couple had also been forced to offer more money to prospective landlords in the hope to remain competitive against other rental seekers.

Abhi and Urvi Bajaj out front of their new rental in Somerton Park. Picture: Michael Marschall

“We were looking everywhere but couldn’t find anything for a good month,” he said.

“The problem is that there is so much competition, people looking for houses and I even ended up offering $10 over the asking price but I still kept being rejected.

“We’re lucky that we finally found a home, even if it’s not what we were hoping for, but beggars can’t be choosers.”

Chris Tepper from Ray White Corporate said Covid had been the main driver behind the state’s rental boom.

He said an increasing number of investors were selling their rental stock to cash in on a favourable buyers market.

“The issue is that there’s now less rental stock on the market but still the same amount of tenants looking,” he said.

“As a result, the competition out there is fierce, especially in the middle-range rentals, that’s where we see 40 to 60 applicants for one home.”

Originally published as Rental prices to surge across Adelaide, South Australia, as demand outstrips supply