Surge in demand as people flock back to capitals, report shows
Rental demand has picked up in major capital cities throughout 2022 and brought supply down to record lows, according to new data from PropTrack.
The latest PropTrack December rental report revealed that enquiries per rental listing for that month were up 31.3% year-on-year in capitals, versus 30% in regional areas.
Combined capital city total listings, meanwhile, have fallen 26.3% year-on-year in December, landing to the lowest level since February 2003.
This surge in demand has also driven rental price growth in the capitals, with rents increasing 10% year-on-year compared to the 7.1% hike in regional areas.
“With people now returning to capital cities and overseas migration lifting, it looks as if it will only become more difficult to rent a property in the capitals during 2023,” PropTrack director of economic research Cameron Kusher (pictured above) said.
Kusher named Sydney and Melbourne as “the two largest rental markets in the country,” where rental supply was “reducing quickly” and demand was on an upswing.
“Most of the overseas migration that will occur over the coming years will be in these two cities, which will increase demand for rental accommodation,” he said.
PropTrack’s December data showed that Melbourne had the largest year-on-year total listing decline at 36.5%, followed by the 25.8% fall in Sydney.
The increased pressure in capital cities did give way for conditions in regional areas to ease, bringing regional total listings up 9.8% year-on-year, the largest annual increase since June 2014.
Overall, Kusher said the national rental market remained tight with supply of properties becoming available for rent remaining historically low.
New listings on realestate.com.au were down 6.6% from December 2021 levels and total rental listings dropped 19.5% year-on-year nationally.
“With low volumes of stock available for rent at a time when demand for rentals is strong and is likely to increase further, we expect the market to remain extremely challenging for renters,” Kusher said.
Despite tight conditions, rental price growth was found to have slowed over the final quarter of 2022, with only Sydney (1.8%) and Melbourne (2.3%) recording increases in rent among all capital cities.
According to PropTrack, medial advertised rates were at $480 per week at the end of 2022. Additionally, national rents increased by 6.7% over the past year, up from an increase of 4.7% in 2021.
“Addressing the demand and supply dynamic will take some time which means that supply is likely to remain tight and the cost of renting will increase in the near-term,” Kusher said. “Rent price increases will be much stronger in capital cities, while regional areas are likely to see rental market pressures continue to ease over 2023.”
A report from PropTrack in October showed the number of properties listed for a weekly rent below $400 had hit a record low post pandemic.
