Australia’s Rental Market Surges: Median Weekly Rent Hits $600

The latest PropTrack Rental Report reveals a surge in rental prices, with the median weekly rent across Australia’s capitals jumping to $600 in December 2023, driven by strong demand and a critical shortage of rental properties.

The latest PropTrack Rental Report has revealed that the median weekly rent across Australia’s capitals jumped to $600 in December 2023, which is $150 higher than in December 2021. The regional median rent is now $500 per week, which is $80 higher than two years ago. This surge in rental prices is driven by strong demand from renters amid a critical shortage of rental properties, with more people than ever competing for a shrinking supply of homes. The number of available rental properties sank to a record low in December, with total rental listings down 4.7% over the year and 30.2% below the 10-year average for December. The national vacancy rate was 1.1% in December, with vacancies lower for houses (0.9%) than units (1.7%). These figures were lower than a year ago, and well below levels considered normal.

Australia's Rental Market Surges: Median Weekly Rent Hits $600

According to the report, capital city rents jumped 13.2% in 2023, while regional rents grew 4.2%. Of all the capitals, rents grew the most in Perth, jumping by 20% in the year to December 2023 to a median of $600. Perth has one of the lowest vacancy rates of all the capitals, at 0.73% – second only to Adelaide where the vacancy rate is 0.69%. Melbourne’s median rental price climbed 18.3% to $550, with a reduction in the number of rental properties putting further pressure on prices. Rents in Sydney went up 16.7% to a median of $700, while Adelaide’s median grew by 12.5% to $540, Brisbane’s median rose 9.1% to $600 and Darwin’s median edged up 1.7% to $590. Canberra’s median rental price remained flat at $610. Hobart’s median rent fell by 4.8% to $500, with the total number of rental listings increasing 22.2% over 2023. While the city’s vacancy rate rose over the year, it’s still only 1%, indicating a very tight market.

With rental price growth outpacing home price growth in many markets, gross rental yields have increased, the report found. The national gross rental yield increased to 4.3% in December, which is the highest level since November 2020. Unit rental yields are now the highest since September 2019, at 4.8%, while house rental yields rose to 3.8%. Although Australia’s national median rental price increased by 11.5% over the past year to $580, this pace of growth was slower than in 2022, when rents jumped 15.6%. Only Sydney, Melbourne, Perth and regional Western Australia had faster growth in 2023 than in 2022. While rents are expected to keep rising in 2024, it is said that affordability constraints were limiting how much landlords could lift rents, especially in the regions, which could slow the pace of growth.

The rental market in Australia is experiencing significant growth in rental prices, driven by strong demand and a critical shortage of rental properties. While rental prices are expected to continue rising, affordability constraints may limit the pace of growth, especially in the regions.