Canberra remains Australia’s most expensive capital city in which to rent a house at a median cost of $690 per week, ahead of Sydney on $660, according to the Domain Rent Report March 2023 Quarter released today.
Meanwhile, Canberra was the only capital city where unit rents fell over the March quarter, down from $560 to $550, the first quarterly fall since mid-2020. But it’s still Australia’s second most expensive city in which to rent a unit behind Sydney, where unit rents soared 24 per cent year-on- year to $620 per week.
The new report highlights that Australia’s rental market continues to remain firmly locked in favour of landlords as rising demand and low supply create challenging conditions for tenants in 2023.
Nationally, Australia is experiencing the longest stretch of continuous rental price growth on record as house rents rise for the eighth consecutive quarter and unit rents for the seventh, said Dr Nicola Powell, Domain’s Chief of Research and Economics.
“For the first time since 2009, all capital cities have record house rents, highlighting the rental crisis the country is currently going through,” Dr Powell said.
“The return of international travel in 2021 and 2022 saw Australia’s net overseas migration gain hit almost 304,000 new people in the 12 months to September 2022, providing a significant boost of population gain for Australia. The proportion of overseas migrant arrivals that were temporary visa holders is now sitting at 61 per cent – a substantial driver of rental demand.
“The impact of migration was further highlighted following the announcement from China’s Ministry of Education to stop acknowledging degrees gained online in January. This saw the number of rental searches on Domain from China jump 124 per cent over the March quarter compared to last year. With more demand for rentals and not enough supply, renters will continue to face limited choices and tough competition, particularly for cities that traditionally see a higher intake of residents from overseas like Sydney and Melbourne,” Dr Powell said.
Despite Australia largely remaining a landlords’ market with the number of vacant rentals at an all-time low for the month of March, some tenants will find rental supply has begun to lift marginally. The vacancy rate across the combined capitals is marginally higher than last month’s record low (0.8%).
“Now that we’re out of the busy seasonal change-over period and tenants have settled into homes,
we’ve seen that vacancy rates have slightly improved from the record low of 0.7% to 0.8%. This provides a glimmer of hope that the crisis situation is easing,” she said.
According to Dr Powell, Australia needs to see a massive change to strike the right balance between tenants and landlords.
“No single solution can fix this rental crisis as it’s a compounding issue of the high cost of housing, insufficient investor activity, and the lack of social and affordable housing. Rising investor activity is needed, the build-to-rent sector advanced, additional rental assistance provided for low-income households, more social housing, and assisting tenants transition to homeowners.
