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Surprising Aussie capital most affordable for renters

Australian cash and people sitting at restaurants and cafes in a popular location in the Melbourne CBD to represent that Melbourne is the cheapest city for renters.
Melbourne is the cheapest city in Australia for renters. (Source: Getty)

The Australian rental market continues to tighten, with prices surging to record highs, according to new research.

CoreLogic’s quarterly rental review found the national rental index had its smallest monthly increase this year (up 0.6 per cent), but was still 10 per cent higher than last year.

CoreLogic research analyst and report author Kaytlin Ezzy said the slow monthly growth was not a sign prices were easing.

“The past few years has seen unprecedented growth in rental values,” Ezzy said.

“We saw rents fall marginally over the first few months of COVID but, since August 2020, national dwelling rents have surged almost 20 per cent, equivalent to a weekly rent rise of approximately $90k.”

Ezzy said the increase in rental prices was likely being driven by the strong return in overseas migration, coupled with “extremely tight” rental supply.

She said the easing in rental growth was a little surprising, particularly given such low vacancy rates.

“The slowdown in the rate of rental growth may suggest an increasing number of prospective tenants are starting to come up against affordability constraints,” she said.

Ezzy said cost-of-living pressures, along with rising rents, was putting additional stress on Aussie households.

The cheapest and most expensive cities to rent

Brisbane recorded the strongest quarterly rise in rents (3.8 per cent) of any capital city.

Adelaide and Darwin both recorded an increase in rental values of 3.6 per cent over the quarter, while Sydney, Perth and Melbourne saw rents rise 2.9 per cent, 2.5 per cent and 2.3 per cent respectively.

Canberra was the exception, with rents declining 0.4 per cent over the three months to September.

Rental values across Hobart rose 0.4 per cent, an increase on the 0.1 per cent rise recorded over the three months to August.

Despite recent declines, Canberra maintained its position as Australia’s most expensive capital city rental market (just), with a median weekly rental value of $682.

This was followed by Sydney ($665 per week), Darwin ($590 per week) and Brisbane ($573 per week).

Melbourne retained its position as the most affordable capital in which to rent ($495 per week), followed by Adelaide ($508 per week), Perth ($533 per week) and Hobart ($551 per week).

“With Sydney recording strong rental growth at a time when rents are declining across Canberra, the gap between Australia’s two most expensive rental markets has narrowed to just $17 per week,” Ezzy said.

“Given international migration is expected to continue to support rental demand across Sydney, while affordability is expected to hamper Canberra’s rental growth, it’s likely we’ll see Sydney overtake Canberra as Australia’s most expensive capital city rental market in the coming months.”

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