Australia is experiencing an unprecedented rental market right now. If you’re not already a homeowner or renting, it might be time to rethink your plans for the future because these numbers are worth giving a glance! In recent years, vacancy rates across Australia have been plummeting, and rents are spiking up – especially in places where housing prices haven’t seen much growth, like Sydney. So what does this mean? We may be on track for another record-breaking year of rent increases due to demand outpacing supply as more people come into the market than can afford their place thanks to low-interest rates from banks making mortgages affordable again after so many lending restrictions were put in place during the 2008/09 financial crisis.
What’s going on in the rental market?
The often-touted property bubble has finally burst in Australia, with CoreLogic’s Rental Review for the March quarter finding rental rates had increased up from growth last year and 2.3% annual average over the past decade. (a time when rents typically shrank) The Australian property market is a unique entity. The rental market is one of the most exciting facets, as it can be both profitable and reflective of the state of the economy. One thing to note in recent years has been an increase in demand for rentals from investors. This could mean more people carrying mortgages who want to rent out their properties to help with repayments, or they have bought into the rental market because they think it will provide better returns than putting their money into other financial investments right now. In this article, we explore what’s happening in Australia’s rental scene and how you might be able to take advantage of some opportunities yourself while also protecting your interests as a renter.
The Australian housing market is notorious for its high prices that continue to skyrocket despite a global recession as well as the vast disparity between renters who have it sound financially versus those living paycheck-to-paycheck on substandard accommodations or even homeless due to unaffordable rent increases annually since 2003, which worsened after COVID was introduced into Sydney and Melbourne markets like never before, where many people were priced out just because they couldn’t afford.
Combined regional market rents rose highly in the March quarter, while combined capital rents increased less. Regional units saw the highest quarterly rental growth, compared to just a rise in the capital city units. Capital houses experienced higher rates of rent than regional ones did over this period, and Darwin houses had an increase that was stronger than other cities’ increases.
The most expensive capital city rental markets are Canberra and Darwin. A recent survey showed that the median rent in Canberra is almost double what Sydney’s median rent is. In addition to this information, Australians might be surprised by how much more affordable renting property can be outside these significant cities with gross solid rental yields on offer for those willing to search out properties in other areas!
Job Opening Percentage
The vacancy rates have been on a downward trend since the pandemic, but there are some discrepancies between major Australian cities. For example, Sydney has an unusually high vacancy rate as compared to Melbourne’s. However, other capital cities such as Hobart, Adelaide, Darwin, and Canberra have thrived more than others post-pandemic.
The two largest cities in Australia have been disproportionately affected by international border closures and lockdowns. Sydney and Melbourne see massive amounts of migrants arriving each year, with the more significant majority starting their life in Australia when they rent a property for the first time to settle down. The lack of international students who also rented properties paints a similar story about what is happening there as well – that people are having trouble moving into these large metropolitan areas due to restrictions on mobility across borders within this country’s geographic boundaries or limitations placed upon them because they don’t live close enough to an urban center where jobs may be available while still being able to afford high-cost monthly rentals rates like those found near city centers such as downtown Sydney or central Melbourne sectors which traditionally attract more commuters from.
Rent in Sydney and Melbourne is a different story. The nation’s two largest cities have been disproportionately affected by international border closures and lockdowns. Both major metropolitan areas see massive amounts of migrants arriving each year, with the majority of these newcomers starting their life in Australia with an apartment to rent. Fewer migrant students mean less competition for rentals, which leads me to believe one or both factors will change dramatically over time!
Working-from-home is becoming more and more popular. It’s a great way to cut down on commute time, spend time with family instead of just rushing in the door at six-thirty from an hour-long drive home, or even avoid battling traffic during rush hours. However, this trend has caused rental rates to rise as demand for homes far exceeds supply; vacancy rates are plunging because tenants have nowhere else to go where rents are still reasonable enough that leasing isn’t out of their price range!
Right Time To Buy Home?
With the cost of renting rising and interest rates hitting historic lows, more people are turning to homeownership than ever before. The housing market is showing signs that it’s slowing down—though there’s still some time left for prospective buyers in Australia who want a house with good schools nearby or those looking to build equity by investing their money into property instead of sitting on it through investments like stocks or bonds.