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REA Group reports persistent rental demand amid limited supply in June quarter

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REA Group has released its PropTrack Rental Report for June 2024, revealing continued strong demand for rentals despite limited supply in the Australian market.

Key findings from the report include:

  • National median rent remained steady at $600 per week in June 2024, but increased 9.1% ($50) year-on-year
  • New rental listings on realestate.com.au fell 4.7% compared to June 2023, reaching the lowest level for June since 2010
  • Total rental listings rose 10.7% over the quarter, but remained 4.4% lower than a year ago
  • National rental vacancy rate increased to 1.4% in June, up from 1.1% in the March quarter
  • Median time on market for rental properties increased to 21 days, up from 18 days in the previous quarter

Cameron Kusher, PropTrack Director Economic Research, said the 9.1% annual increase in rents “remains substantial and significantly exceeds both the rate of inflation and household income growth.”

Kusher noted that weakening rental growth likely reflects renters making trade-offs due to high costs, such as renting smaller properties or in less desirable locations.

The report also found:

  • Capital city rent growth (+10.3%) outpaced regional markets (+8%) over the year to June 2024
  • Houses had a lower vacancy rate (1.1%) compared to units (2.1%) nationally
  • Regional markets saw a larger annual drop in total rental listings (-12.5%) compared to capital cities (-1.7%)

Kusher predicted that while rental growth is expected to slow, it will likely continue to outpace inflation, with prices unlikely to stabilize in the short or medium term.

The report suggests that tough rental conditions may be encouraging some renters to purchase homes, as first home buyer loans grew 6.2% and investor loans increased 7.9% annually to May 2024.

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