Renters can expect to see a slowdown in rental growth over the coming months, but the persistent shortage of homes available to rent will keep the pressure on tenants.
National rents remained flat at $600 per week over the three months to June, according to the latest PropTrack Rental Report.
However, national rents have increased by $50 per week or 9.1% since June last year in what has been a significant hit to the hip pocket of many renters.
PropTrack director of economic research Cameron Kusher said rental price growth had slowed over the past year, although it still exceeded both the rate of inflation and household income growth.
“Weakening rental growth likely reflects the trade-offs that renters are making due to the heightened cost of rent and living,” Mr Kusher said.
“Some of these trade-offs may include renting smaller properties, renting in less desirable locations where rental costs are cheaper or sharing rental accommodation with other tenants.”
Tenants’ Union of NSW chief executive Officer Leo Patterson Ross said high rents had put real pressure on people’s ability to meet their other needs, including food and healthcare.
The total number of homes available to rent nationally was 4.4% lower in the June quarter, compared to the same time last year. Picture: Getty
“We continue to hear from people who are struggling to meet those needs because of high rents and an uncertain future,” Mr Patterson Ross said.
“This is true both for people trying to find a new home facing thousands of dollars more a year and for people who already have a home and are worried about their ability to keep it in the face of no grounds evictions and soaring rents.”
While conditions remain challenging, there are some signs that finding an available home to rent may be getting slightly easier as well.
New rental listings were 2.5% higher during the June quarter, compared to the previous quarter, and 2.8% higher than the same period last year.
Total rental listings grew by 10.7% throughout the June quarter, however total listings were still 4.4% lower when compared to the same period last year.
Critically, the national rental vacancy rate rose to 1.4% in the June quarter, up from 1.1% in the March quarter.
However, the national vacancy rate remained much lower than the pre-pandemic era, when the rate hovered around 2.5%.
Other factors such as renter enquiries and the amount of time that a rental home spent on the market also pointed to a slight improvement for tenants.
Source: PropTrack
The number of enquiries per listing fell below the levels recorded in the previous quarter and the same time last year, while the median number of days that a rental property spent on realestate.com.au was 21 days in June, up from 18 days in the previous quarter.
Despite these small wins, meaningful improvements for renters won’t come unless Australia builds more homes quickly.
Greater consideration towards the financing of new housing projects and Australia’s home building capacity was needed to improve housing supply, according to PropTrack.
But the latest housing completions data from the Australian Bureau of Statistics showed new home supply in the first quarter of the year was well below the levels needed to house the country’s growing population.
PropTrack director of economic research Cameron Kusher says rental growth will still outpace the rate of inflation despite an expected slowdown. Image Source
“The supply of homes available for renters still consistently trails the demand for rentals, with this imbalance being persistently exacerbated by limited new housing construction and a heightened number of investors exiting the market in recent years with the rebound in investor purchasing only being witnessed over the past year,” Mr Kusher said.
“While rental growth is expected to slow, we anticipate that it will continue to outpace the rate of inflation, with rental prices unlikely to stabilise in the short or medium term.”
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