The latest PropTrack Rental Snapshot for March reveals rental prices have grown at the fastest pace since pre-pandemic, surging 11% nationally over the past year.
Median rental prices are now $500 per week nationally, with capital city rents up 13% year-on-year, far outpacing regional prices, which grew by 4.5% year-on-year, the report shows.
The March quarter saw rents increase in all parts of the country with the exception of the Australian Capital Territory and regional South Australia.
Sydney, Brisbane, Adelaide, and Perth experienced the fastest growing rent annually of more than 10%, making affordability extremely challenging for tenants in these cities.
However, renters in Perth saw the biggest increase over the past quarter with prices growing by almost 9% in three months.
PropTrack senior economist Paul Ryan said extremely tight conditions, where high demand is far outstripping supply, aren’t likely to ease soon.
“As a result, we expect rental prices will continue to climb,” Mr Ryan said.
“This is particularly the case in capital cities, where rent increases have not yet eased since accelerating in early 2022. In the regions, rent growth has slowed after significant rent increases throughout the pandemic.”
No relief in sight
As demand continues to surge with borders now open and renters flocking back to the cities, prices are expected to continue surging.
The National Housing Finance and Investment Corporation said in its State of the Nation’s Housing research released on Monday that strong population growth post-pandemic and ongoing rate hikes were the main contributors to the housing shortage.
“NHFIC analysis shows housing affordability and supply are likely to remain challenging for some time, underscoring the need for a holistic approach to mitigate the housing pressures Australians are facing,” the agency’s chief executive Nathan Dal Bon said.
The report also found that obstacles in obtaining approvals for housing developments was another major issue in providing enough new supply.
There will be a shortage of apartments and multi-density dwellings for rent over the medium term, with net new additions of 57,000 a year between 2026-2027.
That’s about 40% less than levels seen in the late 2010s, the NHFIC noted.
Property managers faced with desperate tenants
On the ground, property managers are reporting mass turnouts at open for inspections, especially in major cities.
Jenn Durling, department manager of new business at Biggin Scott in Richmond, said she’s never seen the market like this before.
“During Covid, I think we hit 250 vacant properties at one point,” Ms Durling said.
“Then I went on maternity leave and I came back and we had 35 properties on the rent list. Nothing was vacant and everything was leasing on the first inspection at $100 a week more than what it was when I left 18 months ago.”
Tenants are pulling out all the stops to secure a roof over their heads despite the higher price tags, she said.
Ms Durling has been offered rent up front and a lot of desperate pleas from those trying to get a foot in the door.
“Everything’s leasing within the first one or two inspections – it would probably be eight to 10 years since we’ve seen numbers like this through inner-city apartments.
“It’s really brutal out there for the renters. Occasionally we’re getting offered higher rents, but a lot of people wanting to pay three month’s rent in advance to try and secure a place.”
Sourced from realestate.com.au