Decrease in rates also observed in nearly all capital cities
Australia’s rental market saw a significant increase in rental growth in the March quarter of 2024, leading to record high asking rents, according to Domain’s latest Rent Report.
House rents in the combined capitals and all cities, excluding Canberra, have reached unprecedented levels. Specifically, the combined capitals experienced a 5% increase in house rents during the March quarter, the sharpest quarterly rise in 17 years and the second highest ever recorded.
All capital cities, except Darwin and Hobart, reported increases in house rents during this period. Similarly, unit rents have also hit an all-time high in the combined capitals and all capital cities except Hobart, marking 11 consecutive quarters of growth. Notably, unit rents in the majority of capital cities outpaced the growth in house rents, with Adelaide being the exception.
The report also notes a decrease in vacancy rates across all capital cities except Hobart during the last quarter, with Sydney, Melbourne, and Perth experiencing record lows. Adelaide and Brisbane are approaching similar lows, underscoring the tightening availability of rental properties.
“The first quarter of the year usually marks the rental change-over period, and we anticipated it would be one of the most challenging seasons yet due to the already low rental stocks,” said Nicola Powell (pictured above), chief of research and economics at Domain.
“The current rental conditions show this intensified seasonal trend — a surge in tenant demand against a limited supply. This imbalance has consequently fuelled a renewed acceleration in rental price growth.”
Powell remains hopeful, however, that a balancing point in the market will be achieved this year as signs of easing tenant competition and a potential increase in vacancy rates have been observed, suggesting a gradual shift towards market equilibrium.
She also pointed out factors that could influence the rental market’s trajectory, including a decrease in international student visa applications for the first time in over two years, a peak in population growth, and new government strategies aimed at slowing population growth.
“Homeownership is also at the forefront with incentives in place such as Queensland doubling the first-home buyer grant and the federal government’s Help to Buy shared equity scheme, which will help transition some to being owners or fast-track others to a more affordable purchase,” Powell said.
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