How is the cost of renting changing in your city? Rent.com.au has released the latest market data for September 2022, including the shift in median rent, price per room and leasing time. See the full report here.

IN SUMMARY  ?

  • In Sept, there were just short of 50,000 vacant rental properties to cater to a population of 26 million.
  • Australia’s markets have tightened further, with vacancy rates for apartments & houses now around 1%.
  • Overall Australian capital apartment prices rose 2% over the past month and 1.8% higher for houses.

Table 1: Median rent (apartments v houses) and price per room

Metro areaAPARTMENTSMonthly changeHOUSESMonthly changePRICE PER ROOMMonthly change
Source: 2022 Rent.com.au property listing data
Sydney, NSW$5500%$7000%$3000%
Melbourne, VIC$4251.20%$4751.10%$2002%
Brisbane, QLD$4702.10%$5600%$1960%
Perth, WA$425-2.40%$5000%$1750%
Adelaide, SA$4001.30%$4902%$1804%
Hobart, TAS$4504.40%$5500.90%$200-3%
Darwin, NT$480-4.20%$6101.60%$2115%
Canberra, ACT$525-1.90%$650-3.80%$2604%
National median$4902%$5501.80%$2250%

PRICE TRENDS

It’s a tough time to be a renter right now. Some states lack any suburbs with decent rental options, rental costs are on a record run of increases, and the supply of new properties is quickly drying up. The conditions are less than ideal. In September, there were just short of 50,000 vacant rental properties to cater to a population of 26 million. It’s the lowest it’s been since the start of the COVID-19 pandemic and means Australia currently has a vacancy rate that’s hovering precariously around 1%. A healthy rental market vacancy is between 2-3%.

There are some positive signs, with federal and state governments looking at several social and affordable housing programs. Still, their release and effects will take time to make a measurable impact. Australia’s build-to-rent (BTR) market is also gathering steam, and new developments are hitting the market now and soon, but once again, some time away from real market scale.

Offsetting these, of course, are construction challenges in the residential market (to some extent, keeping future homeowners in the rental market longer than intended). Low pipeline building approvals in recent months mean a low number of dwellings will convert into rental properties. Relief will come via new housing stock, but considering the ABS’ latest data, building approvals have decreased, so rental relief won’t be easily fixed.

It’s also worth factoring in the potential demand from the much-needed increase in skilled migration and international students. The planned reboot of immigration to 235,000/year will continue to drive rental demand well ahead of available future supply, impacting inner Sydney and inner Melbourne most, given their higher intake of international students and migrants generally.

Rental affordability is likely to be the critical factor impacting rental demand, with many renters now searching for more affordable alternatives as rents continue to rise. How high rents will increase will be limited to what prospective renters are willing (or able) to pay, with affordability becoming a more significant factor impacting demand.

Another result of the rental crisis is the shift in household demographics, as adult children flock back to the financial security of their parent’s homes. A survey by Finder concluded that 13% of Australians (roughly 858,000) have had an adult child move back home in the past 12 months. Of those who moved back home or had their adult children move back in, almost 1 in 3 (31%) did so due to rental affordability concerns. Interest rate rises and cost of living pressures are forcing many to make significant changes to their lifestyle.

Looking at September’s median rent data, the most affordable metro capital was Adelaide, where apartment rents were $400 a week, up 1.3% from August. Hobart recorded a noticeable increase in median apartment rents month-on-month, rising 4.4% to $450 a week.

WHAT WILL A ROOM IN A RENTAL COST ME? ?

The price per room metric provides an alternate perspective on the cost of renting space within a property in Australia. Apartment rooms today cost 19.2% more on average than they did back in September 2021 (12 months ago), with the steepest of all changes recorded in Melbourne – up 24.4% to $280 a week.

Sydney recorded an annual jump of 16.7%, bringing the price per room for apartments in the NSW capital to $350 a week. Room prices in Perth apartments rose for the fourth consecutive month, up 13.7% to $250 a week in September.

A room in a Canberra apartment will set renters back $350 a week (up 2.9% year on year) – on par with Sydney as the most expensive of all metro areas in September 2022.

Table 2: 12-month change in price per room (Apartments versus Houses)

Metro areaAPARTMENTS% change (annual)HOUSES% change (annual)
Source: 2022 Rent.com.au property listing data
Sydney, NSW$35016.70%$2388%
Melbourne, VIC$28024.40%$16011.60%
Brisbane, QLD$27514.60%$17310.10%
Perth, WA$20013.70%$16010.30%
Adelaide, SA$2008.10%$16512.50%
Hobart, TAS$25011.10%$1908.60%
Darwin, NT$2250.00%$2009.10%
Canberra, ACT$3502.90%$2255.70%
National median$31019.20%$18010.80%

HOW ARE THE REGIONS FARING? ?

In New South Wales and Victoria, the pandemic saw house rents in the regions overtake capital city apartment rents for the first time. In VIC, they remain almost neck-and-neck, while in NSW, capital city unit rents have crept past regional rents for houses.

In Queensland, regional asking rents are now more expensive than Brisbane for apartments. Increased interstate migration as people escaped Melbourne’s lockdowns and Sydney’s prices have sent QLD’s asking rents through the roof.

Commuting towns within an hour or two of the city, coastal regions and so-called lifestyle areas have seen some of the steepest increases in asking rents – among them are the Gold Coast, Wide Bay and Sunshine Coast in QLD; Richmond-Tweed, Coffs Harbour and the Central Coast in NSW; Bunbury and Mandurah in WA; and LaTrobe-Gippsland in VIC.

Table 3: % change to regional rents in September 2022

State/TerritorySep-22% change from Sept '21
Source: 2022 Rent.com.au property listing data
New South Wales$5008.70%
Victoria$3905.40%
Queensland$50016.20%
Western Australia$47011.90%
South Australia$35018.60%
Tasmania$4005.20%
Northern Territory$480-5.40%
Aus. Capital Territoryn/an/a
National median$48011.60%

HOW LONG ARE RENTALS TAKING TO LEASE?

Rent.com.au’s average time on market measure is designed to explain the movement in median rents across Australia. The 21 median days to lease a property in Hobart in September was 23% slower than in August – and the most significant change to time on market for both property types across the board.

Melbourne houses stayed on the market the longest in September, averaging 22 days listed on Rent.com.au before leasing. Annually, the most significant change for houses was recorded in Adelaide, leasing 11% quicker than in September last year.

Table 4: Monthly and annual change to time on market

Metro areaAPARTMENTSMonthly changeAnnual changeHOUSESMonthly changeAnnual change
Source: 2022 Rent.com.au property listing data
Sydney, NSW17 days9% faster35.6% faster21 days1% slower0.7% slower
Melbourne, VIC21 daysNo change45% faster22 days1% faster5.3% faster
Brisbane, QLD12 days1% faster41% faster15 days5% faster2.1% faster
Perth, WA14 days9% faster23.7% faster14 days6% faster11.5% faster
Adelaide, SA15 days2% slower20.9% faster17 days11% slower5% slower
Hobart, TAS21 days23% slower21.7% slower18 days5% slower15.7% slower
Darwin, NT14 days14% faster17.6% faster17 days5% faster6.1% faster
Canberra, ACT21 days5% slower43.4% slower21 days5% faster24.5% slower

Rent.com.au

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