The total number of available rental properties in Australia has fallen 20.5 per cent compared to last year, new research has found.
According to realestate.com.au, available rental properties are at the lowest level since mid-2003 and prices are surging.
But demand has continued to surge as a result of Aussies who migrated to the regions during COVID flocking back to the cities, and international students and workers returning.
Vacancy rates - the amount of properties available to rent - fell to a historic low of just 1.6 per cent in September.
And for those on the hunt, rental properties are being snapped up quicker than ever before with the median number of days a property is listed for rent at just 19 days.
Thanks to the high competition, rents surged 4.3 per cent in September - the fastest quarterly pace on record.
PropTrack director of economic research Cameron Kusher said Australia’s rental market remained “significantly tight” and it was expected to get worse.
“With fewer investors purchasing homes to rent out, the limited supply of stock, coupled with strong demand, is leading to heightened increases in advertised rental prices,” Kusher said.
“The growth and tightness in the rental market appears to be shifting from regional areas back to the capital cities.
“This is being driven by the return of many people, who migrated regionally during the pandemic, back to capital cities and the lift in overseas migration.”
Kusher said conditions were particularly tight in Sydney and Melbourne, where most overseas migrants to Australia tended to settle.
“[That is] likely to keep demand for rentals heightened as supply of rentals is expected to continue to recede, pushing prices higher,” he said.
“The solution to the current tight rental market is either more rental supply or less rental demand, or a combination of both.
“These demand-and-supply issues can be addressed but none of these factors appear set to change in the near-term, which means a further tightening of rental supply and increases in rental costs seems likely over the coming year.”