Real estate boss explains why
Rents for houses in Adelaide have risen by approximately $60 a week compared to a year ago, surpassing the costs in Melbourne and Hobart, new PropTrack figures showed.
The city’s median advertised rent for houses reached $560 per week, marking a 1.8% increase in the last three months of December and a significant 12% rise over the past year.
The average median rent for houses in Melbourne and Hobart, meanwhile, stood at $550 per week, showing a 14.6% increase in Melbourne and remaining flat in Hobart compared to the same period last year, News Corp Australia Network reported.
Matt Lindblom, CEO of Ray White SA, found the higher advertised rents for Adelaide houses unsurprising.
“With Melbourne, they’re much more aligned to a culture of living in apartments,” Lindblom said. “With Hobart, because it has an older demographic, there’s a higher population of owner-occupiers, so there’s not as much demand for renting.”
The median advertised rent for Adelaide units increased by 2.2% over the quarter and 9.5% in 2023, reaching $460 per week. This rate is on par with Hobart, making them the cheapest in the country and $60 per week less than those in Melbourne.
However, unit rents are still approximately $40 a week higher than a year ago.
Lindblom anticipated that the hurdles confronting financially strained tenants in Adelaide will likely persist for at least another year.
“I feel like the rental market will be stronger than the sales market for a longer period of time,” he said. “With the sales market, there’s more stock coming, which will increase supply, whereas with rentals, I feel like they will still be in fairly high demand.”
The Ray White SA leader said that a possible resolution would be if property prices began to stabilise, and more tenants chose to transition from renting to buying.
House rents in regional South Australia experienced a 1.8% decrease in the December quarter but were 9.4% higher than a year ago. Unit rents rose by 3.4% for the quarter and 11.1% for the year, with median advertised rent for regional houses at $383 per week and $300 per week for units.
Nationally, median advertised house rents increased by 3.4% for the quarter and 9.1% for the year, reaching $600 per week. Meanwhile, unit rents experienced a 1.8% uptick in the three months to December and a significant 13.1% rise over the year, reaching $560 per week.
Signs of easing rental growth
Angus Moore, senior economist at PropTrack, noted the challenging rental markets nationwide due to robust demand and constrained vacancy rates pushing prices upward. But said there were some signs that the pace of growth might be slowing, News Corp Australia Network reported.
“While rents are still growing very quickly, rent growth in 2023 was slower across the combined capital cities compared to 2022,” he said.
“As we head into what is typically the busiest time of year for rental markets in January, renters will, unfortunately, continue to face growing rents.
“There may be some relief on the horizon, with signs that growth is starting to ease.”
To read the original report, visit the realestate.com.au website. You can also read this article for more information.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
