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$515 a week: Rents break records but there’s hope for tenants yet

·4-min read
Houses for rent
Vacancy rates are creeping higher in some cities, providing a little more choice for renters in tight rental markets. (Source: Getty)

Rents may have surged to record levels in the June quarter but stabalising vacancy rates in all but one capital city suggests there’s a little relief on the way for tenants.

National rents have soared to a new record high of $515 a week for houses and $460 for units, according to the quarterly Domain rental report, with the country seeing its strongest annual growth in 14 years.

The sharp rise in rentals has pushed many Aussies into rental stress, with 2.7 million reported to be spending more than 30 per cent or more of their income on rent last month.

Capital City

Jun-22

Mar-22

Jun-21

QoQ

YoY

Sydney

$620

$600

$550

+3.3%

+12.7%

Melbourne

$460

$450

$430

+2.2%

+7.0%

Brisbane

$520

$500

$445

+4.0%

+16.9%

Adelaide

$480

$460

$430

+4.4%

+11.6%

Perth

$495

$480

$450

+3.1%

+10.0%

Hobart

$540

$525

$500

+2.9%

+8.0%

Canberra

$690

$680

$620

+1.5%

+11.3%

Darwin

$600

$600

$580

0.0%

+3.5%

Combined Capitals

$515

$500

$460

+3.0%

+12.0%

Source: Domain

However, renters in most cities are starting to see a little more choice and slightly less competition as investment activity has picked up.

The national vacancy rate has been sitting at 1 per cent for the past four months, according to the report.

“While it is still a very competitive market, increased investment activity has helped to ease some pressure on tenants, with national vacancy rates holding for the fourth month and the choice of rentals nudging higher over June,” Nicola Powell, Domain’s chief of economics and research, said.

“This, together with new first home buyer government incentives, such as Help to Buy, has the potential to assist the transition of more tenants becoming homeowners, easing some of the demand pressures that the rental market is currently facing.”

Darwin was the only place to see lower rents, with house rents holding steady and unit rents falling over the June quarter.

Renters in Canberra may also be on track for easing conditions as choice started to improve, with the vacancy rate lifting to a six-month high.

“This needs to continue, as the city still remains a landlords’ market, but the higher supply is helping to ease conditions a little for tenants on the hunt for a rental,” the report said.

The number of renters per listing has slipped by 19 per cent, although it’s still significantly above the five-year June average.

In Perth, landlords are still in the better position but vacancy rates have nudged higher from the recent record low, and the number of potential renters per listing has slid from its peak.

The report also noted the pace of quarterly and annual rental price growth had slackened, suggesting surging rents could be cooling.

There’s also hope on the horizon for renters in Hobart. Although the city “remains in the middle of a rental crisis and firmly a landlords’ market”, the city saw its fourth consecutive month of rental-listing increases due to more investors entering the market.

This has reduced competition between renters, with the potential number per listing slipping 16 per cent over the past year and now sitting just 2 per cent below the five-year June average.

In Sydney, renters saw minor relief due to a boost in investment activity that led to vacancy rates holding for the fourth month this year and the choice of rentals nudging higher over June.

In Brisbane, the vacancy rate remained at an all-time low of 0.6 per cent. Securing a rental in some suburbs has been likened to finding “a needle in a haystack”.

Adelaide remained the most competitive rental market in the country but vacancy rates held steady over the past three months.

In Melbourne, vacancy rates are still shrinking, with renters now faced with less than half the choice compared with the same time last year.

The city is heading towards the record-low vacancy rates of 1.1 per cent seen in 2018, which could see Melbourne become a tighter rental market than Sydney if the trend continues.

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