Rent prices have shot up as the number of available properties dips to its lowest rate in 19 years, according to new data.
REA group’s PropTrack Rental Report March 2022 found weekly rental prices across the country rose 4.7 per cent over the year to March.
This is the strongest price growth recorded since 2015.
The total number of properties available for rent in March 2022 was the lowest since August 2003, falling 4 per cent in March 2022 to be 24 per cent lower, year-on-year.
The report found low stock had driven competition, with demand near record-high levels nationally after rising 37.1 per cent year-on-year and at an historic high across the capital cities in March 2022.
However, it’s not all bad news. While capital-city demand is at new heights, a slight pullback in demand in regional areas has become evident.
“The strong demand for rentals experienced in 2021 has continued over the first quarter of this year,” PropTrack director of economic research Cameron Kusher said.
“Demand remains near record-high levels nationally, sitting at an historic peak throughout the combined capital cities in March 2022.”
Kusher said the volume of properties listed for rent at a national level had continued to reduce over recent months, exacerbating shortages of stock and pushing the cost of renting higher.
“However, there is some evidence that some of the rental pressures may be easing in certain regional areas,” he said.
“Sunshine Coast, Geelong, and Southern Highlands and Shoalhaven are three prevalent markets where several indicators suggest rental demand is slowing.”
Kusher said other regional areas may see a similar trend emerge as those who moved during lockdowns either decide to stay and potentially look to purchase rather than rent, while others may now look to relocate back to the major cities, given they had reopened and lockdowns had ended.
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“Regardless, renting remains a tough proposition for many people across the country, with the strong demand and limited supply meaning properties are renting quickly and rental rates are rising,” he said.
“It looks unlikely that there is any significant relief on its way.”
Kusher said international borders reopening and migration recommencing was bound to put even more pressure on the rental market in the coming months - driving prices even higher.
“This is expected to be most prevalent in Sydney and Melbourne, the two largest rental markets in the nation and the two markets that have, until recently, been experiencing falls in rental rates,” he said.
“While the increase in investor purchasing that has been occurring should add to supply in the market, it will take time for this additional purchase activity to alleviate the current supply pressures.”