PropTrack report reveals escalating rental costs across Australia
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A recent PropTrack Market Insight report for June 2024 has unveiled a significant rise in rental costs across Australia, driven by low vacancy rates and population growth.
The report highlights the ongoing challenges faced by renters, with widespread increases in rental costs observed across both urban and regional areas.
The June quarter saw apartment rents increase substantially in Australian capital cities and regional areas. The surge in rental prices is attributed to persistently low vacancy rates coupled with a growing population, which has intensified the demand for rental properties. This trend underscores the mounting difficulties for renters seeking affordable housing options.
Sydney continues to hold the title of the most expensive capital city for renters, with the median advertised rent reaching $740 per week. This marks a 2.8% increase over the quarter and an 8.8% rise year-on-year. The city’s high rental costs reflect the intense competition for housing, exacerbated by limited supply and increasing demand.
Perth has emerged as the second most expensive capital city for renters, with the median advertised rent climbing to $650 per week. The city’s rental market has experienced robust growth, driven by a combination of economic factors and population influx. This trend is indicative of the broader challenges faced by renters across the country.
The report reveals that six out of eight capital cities experienced rent growth in the June quarter. Only Hobart and Darwin saw declines, though rents in these cities remain higher than they were 12 months ago. This indicates a general upward trend in rental costs across the nation, with only a few exceptions.
The median weekly rent increased by 3.2% across capital cities and 3.9% in regional areas over the quarter. Year-on-year, rents have risen by 10.3% in capital cities and 8% in regional areas. These figures highlight the extent of the rental crisis, with tenants facing escalating costs in both metropolitan and regional locations.
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A notable trend identified in the report is the outpacing of unit rents over house rents, narrowing the gap between the two.
In capital cities, houses now command only a $30 premium over units. This shift suggests a growing preference for apartment living, possibly driven by affordability concerns and changing lifestyle preferences.
Perth recorded the strongest rent growth among capital cities over the past 12 months, with an impressive 18.2% increase. Adelaide followed with an 11.8% rise, and Melbourne saw a 10.6% uptick. These cities have witnessed significant rental price hikes, reflecting the broader challenges in the rental market.
Among regional areas, Queensland experienced the sharpest growth in advertised rents, making it the most expensive regional market with a median rent of $620 per week. The state’s rental market has been buoyed by strong demand and limited supply, contributing to the steep rise in rental costs.
Anne Flaherty, Senior Economist at PropTrack, commented on the deteriorating conditions for renters over the June quarter. She noted that persistently low vacancies and population growth have driven demand for rental properties higher, exacerbating the challenges faced by tenants. Flaherty’s insights underscore the urgent need for measures to address the rental crisis and provide relief to struggling renters.
The PropTrack report paints a stark picture of Australia’s rental market, with widespread increases in rental costs across both urban and regional areas. The data highlights the pressing need for policy interventions to alleviate the burden on renters and ensure access to affordable housing.
As the rental crisis deepens, stakeholders must collaborate to find sustainable solutions that address the root causes of the issue and provide much-needed relief to tenants across the nation.
The ongoing rise in rental costs underscores the importance of addressing the underlying factors contributing to the crisis. With low vacancy rates and population growth driving demand, it is crucial to explore strategies that increase housing supply and improve affordability.
As the rental market continues to evolve, the need for comprehensive and effective solutions becomes increasingly urgent.