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Look away Australian tenants dreaming of rental reprieve, new data from PropTrack revealed the national rental crisis worsened in the September quarter.
This is according to the research firm’s latest Rental Report, which covered the three months to September, and found that new listings fell 5.7 per cent in the previous 12 months, marking their lowest level in over a decade.
This decreased flow of new listings onto the market means the total number of rental listings, which fell 7.1 per cent last year, is at record low levels.
PropTrack director of economic research, Cameron Kusher, described the Australian rental market as “extremely challenged” given the “significant competition for limited rental stock available”.
As a result of this ultra-competitive, low-stock environment, national rents have skyrocketed over the last year, with the report indicating Australia’s median weekly advertised rent has soared nearly 15 per cent in the past 12 months, and 3.8 per cent in the September quarter.
For Australian renters, these findings should come as no surprise, given the intense environment they’ve found themselves in during this period. Such is the plight of tenants, new research found renting is worse for an individual’s health than smoking or unemployment.
The findings from a joint study by the University of Adelaide and the University of Essex indicated the stresses of housing insecurity coupled with rising unaffordability lead to biological ageing to occur more quickly among those who rent.
PropTrack’s report found the number of rental enquiries per property is around 24.8, up slightly on the 24.5 recorded last year and indicative of the cut-throat nature of securing an Australian rental in 2023. Additionally, rental properties are being snapped up quicker too, with properties listed on average for just under three weeks (20 days).
The report stressed the “critical need for additional housing, particularly in the major capital cities”, given the persistent low supply of rental stock and ever-increasing demand, which has been driven by recently rising migration influxes.
“The rapid rate of migration to Australia is also exacerbating competition for rentals, with the majority of people arriving not owning a property,” Mr Kusher said.
Given the March 2023 quarter is the strongest three-month period of recorded net overseas migration and Australia’s detrimental housing shortfall, which is showing no signs of slowing down soon, it appears the nation’s rental woes are far from over.
Heavily influencing these sustained rental issues is a large exodus of investors from national markets, which is “keeping the overall stock of rental properties low”.
Moreover, higher rents and wider cost-of-living pressures are making it increasingly difficult for first home buyers to save for their deposit as they combat reduced borrowing capacities and rising prices.
This, Mr Kusher explained, is “making it difficult to enter into home ownership”. His claim is supported by Canstar, which revealed the great Australian dream faces the threat of extinction, should the current trajectory of home value increases continue.
Moving forward, he conceded rents are expected to rise throughout Australia’s capital cities in light of the stark imbalance between supply and demand. On the flip side of things, the nation’s non-metropolitan hubs can expect easing rental growth as available rental stock, and subsequently vacancy rates, increase.
Mr Kusher stressed: “These conditions highlight why it is so important to build more housing, particularly in the major capital cities.”
“With dwelling approvals and commencements at decade lows and this trend unlikely to change in the near term, immediate solutions should focus on encouraging investment and better utilisation of existing housing,” he concluded.
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