Powered by MOMENTUM MEDIA
realestatebusiness logo

Breaking news and updates daily. Subscribe to our Newsletter!

Home of the REB Top 100 Agents
Breaking news and updates daily. Subscribe to our newsletter

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Rents rise at sharpest pace in 7 years

By Juliet Helmke
19 July 2022 | 1 minute read
Melbourne skyline river reb

A small increase in new listings in the month of June did little to create space in the rental market, with demand remaining strong across the country.

PropTrack’s data from the June 2022 quarter revealed that median weekly advertised rents increased by 2.2 per cent over the previous three months and were 7 per cent higher year-on-year, which is the strongest level of growth experienced since 2015.

According to Cameron Kusher, PropTrack’s director of economic research, the data from this quarter reflects both a slow return to pre-pandemic norms as well as tough news for those seeking rental properties in the short term.

Advertisement
Advertisement

Over the past year, the divergence between capital city and regional rents has been significant, with capital city rents 4.4 per cent higher compared to a significantly larger 11.4 per cent increase in regional areas. But the distance between the two might be starting to narrow.

Rents in the combined capital cities increased by 2.2 per cent over the quarter — just slightly lower than the 2.3 per cent rise in regional markets.

“Over the quarter, demand for rentals has remained strong across the major capital cities. Though, demand has started to ease somewhat in the regional markets that were very popular during the past few years, indicating a shift back towards cities as life returns to normal,” Mr Kusher said.

“While house rents were driven higher as people sought out more space in the pandemic, we’ve started to see this even out over the quarter. House rents increased by 2.1 per cent over the past three months and 8.9 per cent year-on-year, while unit rents were 2.3 per cent higher over the quarter and 4.8 per cent higher year-on-year.”

Over the past 12 months, rental growth has been greatest in regional South Australia (17 per cent), Darwin (14.6 per cent), and regional Western Australia (12.8 per cent). All of the regional markets across the country except for those in NSW and Victoria recorded double-digit rental growth. 

Meanwhile, in the cities, Adelaide and Darwin were the only capital cities to record double-digit rental growth. And even with costs increasing across the country, the inner- and middle-ring areas of Sydney and Melbourne still remain lower than they were pre-pandemic.

Mr Kusher noted that investor activity, while picking up, was not making a big enough impact to slow rising costs. For many, the financial incentives were not lining up well enough to encourage increased investment or dedication to the long-term market. 

“While investor borrowing as a share of total lending is increasing, we’re still seeing a heightened volume of sales from investors and the re-opened borders are likely encouraging landlords to move their properties from the long-term to short-term rental markets, further reducing supply,” Mr Kusher noted.

And despite strong growth in rents over the past year, the rapid rise in property prices has outpaced rent increases, which has caused gross rental yields to drop. Nationally, rental yields were 3.8 per cent in June 2022 compared to 4.1 per cent in June last year.

In the short-term, rental markets look to remain tight for some time.

“The ultimate solution to the tightness of the rental market is more rental properties. Increased investor purchasing is addressing this, but it will take some time to ease the existing pressure,” Mr Kusher said.

“Federal and state governments continue to offer incentives to first-home buyers, and with property prices falling and rents rising, this may encourage some to move from renting to ownership. Over time this may ease some of the rental supply pressures, but it is likely to mostly be offset by the return of arrivals from overseas, most of whom seek rental accommodation on arrival.”

Rents rise at sharpest pace in 7 years
Melbourne skyline river reb
lawyersweekly logo

Tags:

ABOUT THE AUTHOR


Juliet Helmke

Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.

Rankings
rankings
JUST RELEASED
May 09, 2022

REB Top 50 Women in Real Estate 2022

REB is thrilled to present the Top 50 Women in Real Estate 2022 ranking, which sets t ... LEARN MORE

rankings
JUST RELEASED
May 04, 2022

REB Top 100 Agents 2022

Now in its second decade, the REB Top 100 Agents 2022 rankings are the most revered s ... LEARN MORE

rankings
JUST RELEASED
May 02, 2022

REB Top 50 Agents NSW 2022

Even a pandemic has not put the brakes on the unstoppable property market in NSW, whi ... LEARN MORE

rankings
JUST RELEASED
April 27, 2022

REB Top 50 Agents VIC 2022

The COVID-19 crisis has not deterred the property market in Victoria, which has been ... LEARN MORE

rankings
JUST RELEASED
April 25, 2022

REB Top 50 Agents QLD 2022

As the property market continues to roar in Brisbane and Queensland, the REB Top 50 A ... LEARN MORE

Coming up

rankings rankings

 

Subscribe to our RPM
mailing list

 

Do you have an industry update?

top suburbs

12 month growth
Box Hill
127.02%
Mollymook
82.85%
Brightwaters
79.93%
Cleve
78.13%
Bawley Point
76.2%
Murrays Beach
75.57%
Terranora
70%
Crescent Head
69.38%
Park Ridge South
68.32%
Mollymook Beach
67.09%
SEE AREA REPORTS ON SMART PROPERTY INVESTMENT WEBSITE
Subscribe to Newsletter

Ensure you never miss an issue of the Real Estate Business Bulletin.
Enter your email to receive the latest real estate advice and tools to help you sell.