Yahoo Finance Grim rent reality check as unit prices almost as high as houses
But one expert said the stars are starting to align that could prevent you from paying more in rent.
The housing crisis in Australia has many people struggling to find or keep a roof over their heads as the cost of renting climbs. And the latest research shows the worrying trend is continuing throughout 2024.
New data from Domain reveals units have experienced a record-breaking 11th consecutive quarterly increase, with Aussies paying a median price of $620 per week for an apartment in an Australian capital city. But there could be relief coming this year.
Domain Chief of Research and Economics, Dr Nicola Powell, told Yahoo Finance there was likely to be a "tipping point" reached in 2024 that would see rents stop rising, but couldn't say when.
Are you struggling with rising rent? Email stew.perrie@yahooinc.com
Rents appear to have peaked in most cities
"We're seeing that happen in certain areas where rents are actually falling in some areas in Australia," she said. "When you look at views per listing, it looks at the number of potential renters per listing, that's been declining. And that's pretty entrenched in the market now.
"So it means that the peak is past. And what we're seeing is consistently annually, we're seeing fewer views per rental listing. That might be an early indicator that we'll eventually see that vacancy rate track higher."
Vacancy rates across Australia are fairly grim at the moment.
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Domain's data shows Perth and Adelaide lead the country with a vacancy rate of just 0.3 per cent, Brisbane is at 0.7 per cent, followed by Sydney, Melbourne and Hobart (0.8 per cent), then Darwin (1.1 per cent) and then Canberra (1.4 per cent).
What could cause rent to stop increasing?
Dr Powell explained the decline in the number of people looking for listings is due to a range of factors.
"We're likely to be past the peak rate of population growth we're in, even when you look at international student visa applications," she told Yahoo Finance. "It declined for the first time in about two years.
"Then you've got other things like Help to Buy meant to come into fruition next financial year, that should help some tenants transition to homeowners.
"If you think about the state base, the Queensland government has doubled their first homebuyer grant...And when you have an incentive like that, that has an expiry date, it has that vacuum effect, it brings forward a whole lot of demand.
"And what that means is it will help take some demand pressure off of the rental market."
So it won't be until at least the second half of the year that Dr Powell predicts some areas will flatline on rental prices, however, some regions could come down.
Comparison of unit vs house in all capital cities
All capital cities saw rent increases in the first quarter of 2024, with some seeing record highs.
City | Average price for unit (per week) | Average price for house (per week) |
Sydney | $700 | $750 |
Brisbane | $590 | $620 |
Melbourne | $550 | $570 |
Canberra | $570 | $685 |
Adelaide | $460 | $590 |
Hobart | $460 | $550 |
Darwin | $550 | $650 |
Perth | $550 | $650 |
Sydney is the most expensive city to live in in Australia, with the average renter forking out $750 per week for a house and $700 per week for a unit.
That price for a house is up from $730 from the last quarter of 2023, and dramatically higher than the $660 average seen in the first quarter of last year.
Canberra is the next up on the list, with locals shelling out up to $685 per week for a house, while people in Perth and Darwin pay $650 a week.
The West Australian capital has seen the largest annual increase in rent at 18.2 per cent compared to the same time last year.
Alternatively, Canberra is $5 cheaper on average than the same quarter last year, showing the ball could have started to roll on cities hitting their peak on rental increases. Dr Powell said rents cannot continue to rise at their current pace.
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