Major rent price update as Aussie pensioner cops 'appalling' hike

Rents are still hitting record highs in some cities and renters like Laura Stroud say they will struggle to afford the higher prices. (Source: Getty/Supplied)

A pensioner who has lived in a rental for 40 years will be forced to cut back on essentials like food and heating to stay in her home. Laura Stroud is one of many Australian tenants enduring rent increases.

Record hikes and a lack of properties poured fuel on the rental crisis fire over the last couple of years. But Domain’s latest Rent Report indicates the time of huge rent rises is stagnating in some parts of Australia.

For Stroud, even the $68 increase that will push her weekly rent in Melbourne's Chelsea to $500 is too much.

“I’ve been here since the house was built, I moved in in 1983," she told Yahoo Finance.

"I’ve been here for the whole life of the home and I’ve had my children and raised my children here and helped raise my grandchildren."

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The Melbourne resident suffers from Fibromyalgia and receives a disability pension. While she lives in public housing, her rent is set at the market rate. The government said this is independently assessed, taking into account the age, size and type of the property in line with private rentals in the area.

“Normally they put the rent up about $20 or sometimes $30 each time and then all of a sudden it’s $68 a week," Stroud said.

"I’m just appalled, absolutely appalled that it can be allowed to jump that much on a weekly basis."

Stroud lives with a carer who helps cover a portion of the rent, but she said the increase will still be a struggle for her to afford.

“I don’t want to leave my home so I’ll have to find a way," she said.

"It just means that other things won’t be possible and I’ll try to lower other bills and cut off some things and just live differently I guess."

Stroud said she is already mindful about turning off lights and appliances at the wall, but that it was likely she’d need to cut back on things like heating, groceries and health insurance to cover the rent hike.

“It’d be the essentials. There’s nothing I can really do, I don’t go out and party or go to the movies or anything like that,” she said.

Rent for the majority of public housing tenants is capped at 25 per cent of household income, with tenants able to apply for rental rebates to bring down costs.

"This ensures public housing remains affordable and fair," a Homes Victoria spokesperson told Yahoo Finance.

"This process happens every year and provides tenants an opportunity to update their declared income with Homes Victoria to ensure they only pay what they can afford. This means for some tenants, their rent will go down."

Stroud said she is currently not eligible for a rebate so will need to pay the full market rent. About one in 10 public housing tenants pay market rent.

Are rent prices going down anywhere in Australia?

Here's what is happening across the capitals at a glance.

Houses

• Sydney: Steady but record high

• Perth: Steady but record high

• Hobart: Down $10 from record high

• Melbourne: Increased to new record

• Brisbane: Increased to new record

• Darwin: Increased to new record

• Adelaide: Increased to new record

• Canberra: Increased to new record

Units

• Melbourne: Steady but record high

• Perth: Steady but record high

• Canberra: Down $10 from record high

• Darwin: Down $20 from record high

• Hobart: Down $15 from record high

• Sydney: Increased to new record

• Melbourne: Increased to new record

• Brisbane: Increased to new record

Where is rent getting cheaper?

The reality is that even with prices not jumping higher at the rate they had been, capital cities are still sitting at record highs.

Domain's report found rent was either stalling, falling or growing at a slower pace over the June quarter.

For houses, price growth is now 1.5 times slower across the combined capitals compared to the previous quarter.

The asking rent for houses stagnated in Sydney and Perth, and declined in Hobart.

While Melbourne and Brisbane saw rents rise at half the previous quarterly pace.

House rents have stalled, falled or grown at a slower pace. (Source: Domain)

For units, the pace of growth halved across the combined capitals, three times slower in Brisbane, stalling in Melbourne, Perth and Hobart, and down in Canberra and Darwin.

Higher vacancy rates have supported the slowdown in rent prices, with Sydney, Melbourne, Brisbane and Canberra at a six-month high.

Domain’s chief of research and economics Dr Nicola Powell said rental prices were expected to continue to ease due to several factors.

“Firstly, rental growth is slowing in line with a gradual increase in rental availability which will lead to a rebalancing of supply and demand pressures,” Powell said.

“Secondly, rental demand is easing, as the number of prospective tenants per rental listing has consistently fallen throughout 2024.”

It's a similar story for units. (Source: Domain)

This reflects overseas migration passing a peak, Powell said, with further declines expected in the year ahead. The government’s migration strategy will also slow population growth.

An increase in investors entering the market and increased first-home ownership, thanks to government schemes, are also expected to provide tenants with “further much-needed relief” over the next year.

Across the capitals, house rents have risen 11.1 per cent annually to reach a new record of $650 per week. Unit rents have increased 8.6 per cent annually to hit $630 per week.

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