Relief expected to continue into 2025
Several rental market indicators are now shifting in favour of tenants – a trend that will likely continue into the next financial year, offering further relief for them, according to Domain’s Rent Report for the June Quarter of 2024.
The report indicated that most major cities are experiencing declining rent prices, slower growth, or stable rates, with quarterly rental growth across the combined capitals now 1.5 times slower than the previous quarter.
Melbourne and Brisbane saw rental growth halve, Adelaide’s growth slowed sevenfold, while Sydney and Perth stalled, and Hobart declined. The quarter marks the weakest June for house rents since 2021 in Sydney and Melbourne, and since 2020 in Brisbane, Adelaide, and Perth.
Unit rents followed a similar pattern, with quarterly growth halving across the combined capitals, slowing threefold in Brisbane, stalling in Melbourne, Perth, and Hobart, and declining in Canberra and Darwin. The quarter was the weakest for unit rents since 2021 in Sydney, Melbourne, and Brisbane, since 2020 in Canberra, and since 2018 in Perth.
Improved vacancy rates have supported the slowdown in rent price growth. Sydney, Melbourne, Brisbane, and Canberra are at a six-month high, while Perth has reached a two-year high. Adelaide is at its highest point in two years and eight months, and Hobart is at a nine-month high.
“We recognise the challenges renters have been facing, so it’s encouraging to observe our latest data showing easing rental conditions,” said Nicola Powell (pictured above), chief of research and economics at Domain. “Looking ahead, Australia’s rental market will continue to be more balanced, driven by several factors.
Powell highlighted a gradual increase in rental availability and a consistent fall in the number of prospective tenants per rental listing throughout 2024. This aligns with a peak in overseas migration, which is expected to decline further. She added that the federal government’s migration strategy that aims to slow population growth further eases rental demand.
“Investors have also made a slow comeback, accounting for nearly 36% of new home loans — the highest proportion since 2018,” she said. “Increased first-home ownership is imminent, supported by initiatives like Queensland’s doubled first-home buyer grant, the federal Help to Buy shared equity scheme, and revised stamp duty concessions in ACT, South Australia, Western Australia, and Queensland.
“These measures aim to facilitate home ownership transitions and improve affordability, further alleviating rental conditions in Australia. All these will provide tenants with further much-needed relief in FY25.”
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