Rental snapshot - March 2023

Rent.com.au’s March 2023 report shows changes in Australian median rental prices, affordability, and time on the market. Here is the latest data on the country’s metro and regional property leasing trends.

IN SUMMARY  

  • Sydney, NSW: Sydney’s monthly change in apartment rent is the highest among all the metro areas, with a 4.7% increase.
  • Brisbane, QLD: Brisbane also saw a significant increase of 4.7% in apartment rent, indicating a strong demand for rental properties in the area.
  • Darwin, NT: Darwin had a 3.7% increase in apartment rent, despite a notable decrease of 7.3% in the price per room.
  • Canberra, ACT: Canberra saw a 5.1% increase in the price per room for rental properties, the most significant monthly change for this metric among all the metro areas.
  • Adelaide, SA: Adelaide had a decrease of 1.9% in house rent, which is the highest among all the metro areas for this metric.

VACANCY RATE CHANGES

  • NSW: 2.9% more rentals available
  • VIC: 3.2% increase in availability
  • QLD: 3.3% extra rentals available
  • WA: Availability climbs by 10.1%
  • SA: A 3.7% lift in the number of rentals available
  • TAS: An uptick of 16.6%
  • NT: 12.1% decrease in availability
  • ACT: Available homes decrease by0.1%

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

Metro areaAPARTMENTSMonthly changeHOUSESMonthly changePRICE PER ROOMMonthly change
Sydney, NSW$6304.7%$7500%$3250%
Melbourne, VIC$4800%$5001%$210-0.9%
Brisbane, QLD$5254.7%$6000%$2100.9%
Perth, WA$5004%$5600%$2000%
Adelaide, SA$4200%$510-1.9%$183-1.1%
Hobart, TAS$4751.1%$560-1.8%$2163.7%
Darwin, NT$5403.7%$6601.5%$233-7.3%
Canberra, ACT$5400%$645-3.8%$2165.1%
National median$520-3.8%$5750%$237-1.2%
Source: 2023 Rent.com.au property listing data

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PRICE TRENDS

What’s being talked about?

Australia’s housing market remains a significant concern for renters as demand remains higher than the available supply. According to experts, the housing crisis is caused by a perfect storm of rising interest rates, record-low vacancies, and a critical lack of affordable and public housing. Director of the Australian Housing and Urban Research Institute, Michael Fotheringham, describes the current market as chaotic, stating that it’s worse than it has been in several generations due to the intense competition for every property.

In March, the Reserve Bank of Australia (RBA) published a paper that showed how household composition trends have accelerated since the start of the COVID-19 pandemic in 2020. RBA has argued that this change in living arrangements during the pandemic is one reason why rents did not drop sharply in most areas, despite the surge of emigration early in the pandemic and population stagnation while borders were closed. RBA analysts also noted that the decline in average household size since the start of 2020, estimated at around 1%, contributed to the formation of approximately 120,000 additional households. However, the trend of more people renting, primarily out of necessity rather than choice, has been ongoing for years and is another issue that the RBA has mapped out in a separate research note.

According to property market analysts, vacancy rates are a primary factor that allows landlords to keep increasing rents. The RBA also highlights that building rentals is becoming less attractive due to several factors, including higher interest rates, inflation hitting the construction sector, and issues with apartment pre-sales. While landlords may pass on their higher mortgages to renters, RBA Governor Philip Lowe argues that they can only do this in an environment where people have few other choices about where to live. “The lack of accommodation is the critical issue driving higher rents, not higher interest rates,” he said.

The outlook for average household size is uncertain, as it has slightly increased since the end of 2022, possibly in response to tight rental markets, particularly in regional areas. Despite this, rental vacancy rates remain low, and not enough properties are being built to meet the demand, with migration climbing back above pre-pandemic levels. As a result, some individuals and families may be pushed into smaller living spaces. Unfortunately, unless landlords begin to significantly lower rents in response, we may continue to pay more to go back to how we were living before 2020. After years of rent increases and fewer homes being built, this could be a significant setback for many families.

The latest data for March 2023 shows a mixed picture of Australia’s rental market. In most metro areas, median rent prices for apartments rose, with significant monthly changes of more than 3.7% in Sydney, Brisbane, Perth, and Darwin, while Melbourne and Adelaide remained steady. For houses, Hobart experienced a minor uptick of 1.1%, while Darwin and Canberra both recorded moderate increases, and Adelaide saw a decline of 1.9%. In terms of price per room, the national median decreased by 1.2% from the previous month, with substantial monthly drops observed in Darwin (-7.3%) and Adelaide (-1.1%). Meanwhile, Hobart saw a significant upswing of 3.7%, and Canberra also had a positive shift of 5.1%. Although the monthly changes in median rent prices are mixed, the national median declined by 3.8%, indicating challenges in certain rental markets.

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WHAT WILL A ROOM IN A RENTAL COST ME? 💰

Australia’s rental market has witnessed a significant surge in room prices over the past year. Annual changes in price per room indicate an upward trend for both apartments and houses across all major metro areas. The greatest increase in apartment room prices was observed in Melbourne at 25.3%, while Perth experienced the highest increase in house room prices at 11.7%. The national median for apartment room prices is currently $340, up 23.6% from the previous year, while the national median for house room prices is $190, representing an increase of 10.1%. Although most cities saw an increase in the price per room, Canberra’s house prices experienced a decline of 3.1%, making it the only city in this latest data with a negative annual change. These trends suggest a highly competitive rental market, with rising prices potentially making it more difficult for renters to secure affordable housing.

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

Metro areaAPARTMENTS% change (annual)HOUSES% change (annual)
Sydney, NSW$38318.9%$2469.6%
Melbourne, VIC$31025.3%$16611.1%
Brisbane, QLD$30017.6%$1838.6%
Perth, WA$30014.3%$17511.7%
Adelaide, SA$2168.3%$1759.4%
Hobart, TAS$28016.7%$2119.3%
Darwin, NT$2338.5%$2036.1%
Canberra, ACT$37214.6%$210-3.1%
National median$34023.6%$19010.1%
Source: 2023 Rent.com.au property listing data

HOW ARE THE REGIONS FARING? 🌳

The latest data reveals that the median rent across Australia rose significantly by 11.1% in March compared to the same period last year, bringing the weekly rent to $510. New South Wales saw an increase of 8.3%, Victoria had a rise of 5.2%, and Queensland took the top spot with a 10.6% increase. Western Australia wasn’t far behind, shooting up by 15.5%. South Australia had a modest uptick of 2.9%, Tasmania’s rents climbed by 4.7%, and the Northern Territory had a milder increase of 1.8%. The NT still has the highest rents, topping the list at $540 per week in March.

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Table 3: % change to regional rents in March 2023

State/TerritoryMar-23% change from Mar '22
New South Wales$5208.3%
Victoria$4005.2%
Queensland$52010.6%
Western Australia$52015.5%
South Australia$3502.9%
Tasmania$4404.7%
Northern Territory$5401.8%
Aus. Capital TerritoryN/AN/A
NATIONAL MEDIAN$51011.1%
Source: 2023 Rent.com.au property listing data

HOW LONG ARE RENTALS TAKING TO LEASE?

The rental market for apartments in Australia’s metropolitan areas is generally stable or improving, with most cities experiencing faster leasing times or no change. However, the situation for houses is mixed, with some cities seeing faster leasing times while others are experiencing slower times.

In March 2023, apartments in Sydney, Melbourne, Brisbane, and Perth were leased on average within 12-14 days, with Brisbane recording the fastest leasing times for both apartments and houses. On the other hand, houses in Darwin and Canberra took the longest time to lease, with an average of 25 days on the market.

Despite some variations, apartments and houses in most major cities leased faster in March 2023 than in the same month in 2022. While the monthly changes suggest a competitive market in some areas, they may present challenges in others. The time on market (TOM) or time to lease (TTL) provides valuable insight for property owners and managers into property performance and market trends, helping them make informed decisions about rental prices and property improvements.

Table 4: Monthly and annual change to time on market in March 2023

Metro areaAPARTMENTSMonthly changeAnnual changeHOUSESMonthly changeAnnual change
Sydney, NSW14 days1% faster33% faster20 days3% faster2.2% slower
Melbourne, VIC14 days1% faster39% faster20 days5% slower5.6% faster
Brisbane, QLD12 daysNo change12.8% faster16 days4% faster10.4% slower
Perth, WA14 days1% faster13.5% faster14 days1% faster5.9% faster
Adelaide, SA14 days2% faster8% slower16 days6% slower21% slower
Hobart, TAS17 days7% faster36% slower17 days7% faster26% slower
Darwin, NT23 days9% slower33% slower25 daysNo change43% slower
Canberra, ACT20 days14% slower30% slower25 daysNo change48% slower
Source: 2023 Rent.com.au property listing data
Rent.com.au

Rent.com.au is Australia's largest company dedicated to renters and is owned and operated by ASX-listed Rent.com.au Limited (RNT:ASX). For over 15 years, Rent.com.au has exclusively focused on making renters' lives easier by making it easier to find a property, secure it, move in and pay rent.

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