Despite rents in the ACT declining during 2023, Canberra remains Australia’s second-most expensive capital city in which to rent, according to CoreLogic’s Rental Market Update released today, 23 January.
Canberra’s median weekly rent of $651 is the second highest of Australian capital cities behind Sydney at $745. Next is Perth at $630, Brisbane at $627, and Darwin at $611, followed by Melbourne and Adelaide at $565, and Hobart the least expensive at $535.
Canberra and Hobart were the only capital city markets to see a decline in rent values through 2023, at -1.9 per cent and -3.5 per cent respectively.
CoreLogic’s national median rent value (capitals and regionals) ticked up to $601 per week last month, equating to median annual rent of $31,252 a year, a new record high.
Table: Summary of rent market performance – December 2023
| Region | Median weekly rent | Monthly change in rents | Quarterly change in rents | Annual change in rents |
| Sydney | $745 | 0.6% | 2.3% | 10.2% |
| Melbourne | $565 | 0.5% | 1.5% | 11.1% |
| Brisbane | $627 | 0.5% | 1.9% | 8.2% |
| Adelaide | $565 | 0.7% | 2.0% | 7.7% |
| Perth | $630 | 1.2% | 3.6% | 13.4% |
| Hobart | $535 | 0.6% | 0.8% | -3.5% |
| Darwin | $611 | -0.2% | -0.6% | 3.0% |
| Canberra | $651 | 0.2% | 0.9% | -1.9% |
| Combined capitals | $631 | 0.7% | 2.2% | 9.8% |
| Combined regionals | $518 | 0.6% | 1.8% | 4.3% |
| National | $601 | 0.6% | 2.1% | 8.3% |
According to CoreLogic, the national median has increased markedly from $437 per week in August 2020, pushing annual rent values up by more than $8,000 in that time.
Recent growth in rent values, which averaged 9.1 per cent a year for the past three calendar years, stands in stark contrast to the average annual growth rate of 2.0 per cent in the 2010s. This change has been driven by a decline in average household size from late 2020, a rapid increase in the Australia’s population from late 2022, and a temporary shock to investment housing activity between May 2022 and February 2023, as well as other long-term factors, according to CoreLogic.
While annual growth in rents is higher than historic averages, it has broadly slowed.
In 2023, rent values rose 8.3 per cent, down from a peak of 9.6 per cent in the year to September 2022. The slowdown has been most evident across regional Australia, where rents rose 4.3 per cent last year, down from a 13.4 per cent in the year to August 2021. The slowdown in capital city rent growth began more recently, easing from a peak of 10.6 per cent in the 12 months to April 2023, down slightly to 9.8 per cent by the end of the year.
According to CoreLogic, the slowdown in rent growth may be attributed to affordability constraints driving renters back to share housing, or to cheaper markets. Additionally, the recent resurgence in investor activity through 2023 may be gradually helping to ease supply-side constraints.
While the easing in rent growth is good news regarding inflation, CoreLogic reports there was a slight pick-up in annual growth once again in the final quarter of 2023. This ‘re-acceleration’ in rents was most consistent across the capital city house markets but was also evident in regional rent markets.
Notably, the premium of house rents over units has narrowed in the past two years, from $63 per week at the median level to $38. This ‘catch up’ in unit rents could be making them less appealing, diverting tenants back to houses.
Despite the concerning reacceleration toward the end of 2023, rent growth is still expected to slow this year. The continued increase in investment lending, a normalisation in net overseas migration, and the potential for a cash rate reduction could all contribute to a slowdown.
However, in the short term, CoreLogic says the burden largely remains on tenants to secure cheaper housing, whether that be by re-forming share house arrangements, or once again looking to regional or outer suburban markets for rental accommodation.
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