Vacancy rates plunge to record low as rents continue to boom

The index also lists the top 30 most expensive and most affordable suburbs in each of the capital cities, ranked by median weekly rent.

The decrease in listings, combined with a record-low vacancy rate of 1.47 per cent nationally, has resulted in a 4.3 per cent growth in rents over the year to September.

Cotality economist Kaytlin Ezzy said that the persistent shortage in property supply has been driving rental growth, as the national vacancy rate has been sitting below half of the pre-COVID 10-year average of 3.3 per cent.

“Ongoing scarcity in ‘for rent’ listings, coupled with continued strength in rental demand, has pushed the national vacancy rate to a new record low,” Ezzy said.

“Limited supply continues to be a major catalyst in rising rents, with the number of rental listings tracking approximately 25 per cent below the previous five-year average for this time of year.”

According to the data, while rent prices in capital city markets are soaring, regional Australia has remained relatively affordable.

While the capital city average sits at $702 per week, rent in regional Australia is roughly 16 per cent cheaper, coming in at $591 per week.

Renters in Sydney felt the sting of high rents more than any capital city, with the median rental price in some of the city’s more affluent areas exceeding $2,000 per week.

The suburbs of Vaucluse and Rose Bay in Sydney’s east take out the top spots for the highest median rent, with renters paying $2,148 and $2,031, respectively.

The suburb of Mosman, north of Sydney Harbour, rounded out the top three with a median rent of $1,966.

Additionally, Sydney renters have been facing the highest median weekly rent across the board, paying $807 per week, which is more than $100 higher than the average for the capital city.

Perth was home to the country’s second-highest median rental suburbs, where a house in the city’s inner suburbs of Dalkeith, Cottesloe and Swanbourne would set back renters over $1,400 per week.

Similar to the rest of the country, the Western Australian capital’s rental market has been driven by low vacancy rates, recording a rate of 1.1 per cent, below the national average of almost 1.5 per cent.

Suburbs in Melbourne’s inner south claim the top three spots on the city’s most expensive list, with rents in Brighton and Hampton exceeding $1,200 pw, while Sandringham comes in just under at $1,185 pw.

The Brisbane suburbs of Bulimba, Brookfield and Hawthorne were the most expensive in the River City, coming in at over $1,100 pw.

Peak median rents in Canberra, Adelaide, and Darwin all fall between $900 and $1,110 pw.

Hobart maintained its position as the most affordable of the capital cities, with renters in Tasmania’s most expensive suburb, Battery Point, south-east of the city centre, paying around $740 pw.

At the other end of the scale, in the suburbs of Melton South, Melton and Harkness in Melbourne’s west, renters can lease a unit for less than $405 pw, the lowest median weekly rent in the nation.

Melbourne suburbs are among the most affordable in the country, with a total of 12 suburbs coming in at a lower price than the lowest priced offering available in the second most affordable city.

Brisbane ranks second when it comes to affordability, where residents of Caboolture spend just $432 pw on rent.

Despite its place as the most expensive city in the country, the Sydney suburb of Carramar sees the NSW capital also sit in third when it comes to the lowest median rent, with renters spending just $442 pw.

The lowest priced offerings in Adelaide, Hobart, Perth and Canberra all come in between $440 and $491 pw.

Darwin’s property market has the highest floor of any capital city, with the lowest priced suburb of Leanyer coming in at over $500.

Ezzy said that the recent surge in rental prices presents an issue not only for renters but also for owners.

“The news that rents are once again rising at a higher rate will be unwelcome news for renters already struggling with the 43.8 per cent or $204 per week increase in rents seen nationally over the past five years,” Ezzy said.

“But it’s also probably unwanted news for home owners and landlords servicing a mortgage.”

She said that the increased pace of rental value growth could push inflation higher, due to the “rents paid” component of the CPI.

“Along with some renewed upwards pressure from the cost of new dwellings, this renewed momentum in rents may lead to inflation exceeding RBA forecasts, which could keep the cash rate elevated for longer,” Ezzy concluded.