Embattled renters could be in for a little relief, with an expert predicting the rental crisis could reach a turning point this year.
According to Domain’s Rent Report March Quarter 2024, Australia’s rental market experienced a reacceleration of rental growth in the first quarter, on the back of record immigration levels.
However, with population growth slowing, conditions could start to improve.
Rents have reached record levels across all capital cities except Canberra, with house rents jumping 5 per cent alone in the March quarter – the steepest quarterly gain in 17 years.
Domain’s Chief of Research and Economics, Dr Nicola Powell, said despite the tough conditions, conditions could soon lift for renters.
“While Australia’s perilous rental market appears entrenched in a never-ending run of rent rises, we remain optimistic that a tipping point will be reached in 2024,” Dr Powell said.
“Some sub-markets will operate with more balance and rent growth will slow — some areas already show these signs.”
Dr Powell said the number of prospective tenants per rental listing had eased, suggesting some pressure has already lifted.
“This could be an early indicator of an increase in vacancy rates sometime this year,” she said.
“Also, international student visa applications have turned a corner and started to fall for the first time in more than two years, population growth is likely to have peaked, and the Federal Government has introduced a migration strategy that will slow population growth.”
According to the report, house rents had reached a record high across the combined capitals ($630 weekly), marking the steepest quarterly gain in 17 years and the second-highest on record.
Every capital city except Darwin and Hobart recorded a quarterly rise in house rents.
Meanwhile, unit rents across the combined capitals ($620 weekly) continue their record-breaking streak of 11 successive quarters of growth.
They are also at an all-time high across the combined capitals and all capital cities, apart from Hobart, with the combined capitals seeing an unprecedented stretch of 11 successive quarters of growth.
Quarterly gains in unit rents also surpassed houses across all capital cities apart from Adelaide.
Vacancy rates have also decreased in the last quarter across all capital cities except Hobart.
Sydney, Melbourne, and Perth are at record lows while Adelaide and Brisbane are nearing record lows.
Dr Powell said the first quarter of the year usually marked the rental change-over period, which was anticipated to be one of the most challenging seasons yet due to the already low rental stocks.
“The current rental conditions show this intensified seasonal trend — a surge in tenant demand against a limited supply,” she said.
“This imbalance has consequently fuelled a renewed acceleration in rental price growth.”
