New data reveals the shocking scope of Australia's rental crisis, highlighting suburbs where rents have soared by more than 40% in 2023.
Tenants across Australia have been bearing the brunt of significant rent increases throughout the year, exacerbating an already dire situation in a rental market characterized by intense competition for the few available homes.
Price increases are widespread, with rents soaring not only in the metropolitan area's attractive inner-city areas but also in cheaper suburbs as renters chase affordable properties.
Angus Moore, senior economist at PropTrack, said there simply weren't enough rental properties for the number of people who needed housing, which is why rents were rapidly reaching record levels. .
“The reason rents are increasing so quickly at the moment is because there are so few properties available to rent, which means it's very competitive to get a rental property,” he said. Stated. “They are signing leases very quickly, which puts pressure on rents.”
Moore said the roots of the rental crisis go back several years and the effects of the pandemic are still being felt.
“Many shared houses have been demolished and people have moved into smaller households on average, which means we just need more rental properties for the same number of renters, and that's why 2020 and 2021 “We saw a lot of rental demand in 2019,” he said. He said.
“Recently, borders have reopened and the population has increased, which is also contributing to rental demand.”
“But Brisbane and Adelaide have been seeing rent increases long before the border opened, so it's not unique.”
“Another factor is that housing construction is not happening as fast as before the pandemic, which obviously means there are fewer new rental properties coming onto the market.”
Western Australia's suburban areas have recorded the highest price increases in the country, ranging from Perth's more expensive outer suburbs, more affordable areas on the city periphery, and the core of areas serving the mining industry. It is spread over the earth.
The seaside suburb of Swanbourne has seen the fastest residential rent growth in the country, with median published weekly rents rising 42.5% over the year to $1400, making it one of the most expensive suburbs in Perth and Australia.
![](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 800 450"%3E%3C/svg%3E)
In Perth's western suburb of Swanbourne, rental prices rose by 42.5%, with the median price rising to $1400 per week.Photo: Getty
Julie Harrington, senior property manager at Hub Residential, said while demand for rentals outstripped supply across Perth's western suburbs, Swanbourne's desirable location and low supply of available rental properties meant competition was high. It is said that it was intense.
“Swanbourne is actually a smaller suburb so there's more competition,” she says.
Mr Harrington said Perth's rental market had been particularly difficult given the city's population growth and rental property turnover.
“There are more people coming to Perth than there are homes,” she says. “The sales market was so strong that many people also sold their investment properties, so there were fewer rental properties available.”
Western Australia's mining boom has increased demand for rental accommodation in some suburbs, with the Karratha suburb of Pegs Creek topping the list of Australia's fastest-growing rental rates, at 42.9%. Dampier had the second fastest residential rent growth in the state at 38.9%.
Meanwhile, in Sydney, well-connected outer suburbs saw significant increases, with rents increasing by 35.9% in Haymarket, 30.8% in Rosebery, and house rents increasing by 33.3% in Forest Lodge.
The suburbs with the highest growth in house rents tended to be a bit more geographically dispersed, but with good public transport links such as Rydalmere (up 36.4%) and West Ryde (up 32.5%), Parramatta and Ryde. The region's suburbs recorded strong growth. and Denniston East (up 27.7%).
Melrose Estate Agency Managing Director Paul Tassone said the desirable school catchment area and infrastructure were attracting more families to the area, with more families looking to stay long-term.
“Most tenants are looking to buy into the area, but sales prices are going up and it's becoming increasingly difficult to buy,” he said.
“We don't have enough rental properties. The average number of applicants for each property was 17 groups, with more than a dozen applicants.”
Most of the areas in Melbourne's suburbs where rents have increased the most are in the suburbs and east. Kew East had the fastest residential rent growth in the city (38.4%), Aberfeldy had the fastest residential growth (39.7%) and second fastest housing growth (34.6%).
Estate agent Andrew Daprano, of Nicole Gervasi Real Estate, said demand in Aberfeldy was being driven by families, with limited choice supporting rising rental prices.
“There is a lack of properties on the market, so people have fewer options when choosing where to live.”
Mr Moore said the large rise in rents in inner-city areas over the past year was due in part to the relative poor performance of these areas during the pandemic.
“Inner units in Sydney and inner units in Melbourne actually saw rents fall in 2020 and 2021,” he said. “We've more than made up for that drop now, but we still need to catch up in some parts of the country.”
“These areas were less attractive to renters during lockdown, but now all that has changed and we are seeing an influx again.”
The easing of pandemic-era trends is also evidenced by price increases in suburbs with good public transport links.
“What we've seen during the pandemic is that the premium for living near transport hubs has declined during lockdown,” Moore said.
“We've seen rent softening in areas where more people were working from home. As hybrid work increases and more people return to the office, that premium is starting to return.”
High rents are also driving renters to look for more affordable suburbs, and increased demand is driving up rents in these areas.
Renters are targeting affordable areas like Wylie Park in Sydney's south-west, with rents rising as demand increases. This newest of his two-bedroom units in Wylie Park is advertised for $470 a week. Photo: realestate.com.au/rent
Wylie Park, in Sydney's inner south-west, had the city's highest rent increase of 28.6%, with tenants attracted by relatively affordable median rents of $420 per week. The price increase comes as rental demand surged in the suburbs last year.
Jumana Ibrahim, real estate investment manager at LJ Hooker Campsie, said rising rental prices were causing tenants to move to more affordable areas, but large rent increases were not sustainable.
“Now some landlords are asking for a little more, so we're asking people not to come,” she said.
“Right now, the cost of living is so high and interest rates are rising that landlords are trying to recoup some of that by raising rents, but that's not sustainable for long.”
Rental prices rose more in the Launceston suburbs than in Hobart as renters targeted more affordable suburbs. This fully furnished home in East Launceston, where rental prices have increased by his 10% in 2023, is advertised for $850 a week.
Some of Tasmania's most expensive areas to rent last year were in Launceston, the state's second city, and its surrounding suburbs, which are more affordable than Hobart.
In contrast, rents in most Hobart suburbs have remained relatively flat or declined slightly after several years of strong growth, especially in the more expensive suburbs.
Signs of improvement in rental market
Moore said there is some evidence that things are starting to improve for renters.
“There are signs that rent growth is slowing in some parts of the country, and if this trend continues, we could see some easing in the second half of this year,” he said.
“We saw very rapid rent growth in 2023, but not as fast as in 2022 in many parts of the country. This is especially true in rural areas, where rents have actually been flat since June. , with significant growth over the past three years.
Median house rental prices in Sorrento, on Victoria's Mornington Peninsula, fell by 14.1% in 2023, more than any other suburb in Australia.Photo: Getty
While rents rose in most suburbs through 2023, some areas, particularly in New South Wales, recorded declines, including some of the coastal suburbs that had previously experienced rising rents.
House rents fell the most in Sorrento on the Mornington Peninsula, where they fell by 14.1% to $850 a week.
Median rent prices also fell in several suburbs on the NSW Central Coast, including Foresters Beach (down 13.8%), Erina (down 12.2%), Copacabana (down 10%) and Bateau Bay (down 9.7%).
The biggest decline in unit rents was in Forestville in Sydney's north, down 10.8%, followed by Avoca Beach (down 9.8%) and Adelaide's beachside Semaphore (down 9.3%).
Mr Moore said the combination of high rent burdens and the ongoing cost of living crisis could ultimately put a cap on rent increases, with the impact likely to be greater in areas where rental demand is falling. He said there is.
South Australia's Semaphore was one of several coastal suburbs to see rents fall in 2023, with median rental prices falling by 9.3%.Photo: Getty
He said: “One of the reasons why rent growth is slowing is that affordability has fallen significantly, which ultimately puts pressure on how much people can afford to pay in rent. It will happen,” he said.
“Especially in some rural areas, we are not seeing the same demand as we did during the pandemic.”
“Some people are moving to rural areas, but it's not as strong as it was during the pandemic, which has probably taken some of the heat out of the rental market.”
Moore said renters have already begun adjusting their behavior in response to eye-popping rent increases.
He said: “Flatmates has had its busiest year ever, showing that people are starting to look for flatmates to transform their shared home.”
“This is almost certainly a response to the fact that living in a two-bedroom apartment is now much more expensive than it was a few years ago, and much more practical than it used to be. It's not very attractive and it's not very appealing.”
Moore said the solution to alleviating the rental crisis is to increase the supply of rental properties.
“Given that rent growth has returned to a more normal pace, the rental market has become less competitive, and vacancy rates have returned to more typical levels rather than around 1%, That means we need to build more housing.”
“The problem we have is that we don't have enough housing for the number of people who want to rent. The only way to solve that is to build more housing.”
“We are pleased to see that governments are focusing on this issue in a way that we have never seen before.”
“While we are moving in the right direction, it may still be cold comfort for renters at this point as it will still take some time to see any real impact.”
