Rental listings hit rock-bottom in September, chalking up a 5.7 per cent annual decline and the least number of new rental listings for the month in more than a decade, according to PropTrack.
The PropTrack Rental Report for last month showed a 7.1 per cent year-on-year decline in listings volumes, as renters grappled with stiff competition and strong population growth forecasts.
Australia’s national vacancy rate has also been crunched, dropping from 1.3 per cent a year ago to 1.1 per cent last month, which is impacting the cost of rental prices.
Melbourne, Perth and Sydney chalked up the largest declines in total rental listings, down more than 30 per cent on their September five-year averages.
PropTrack director of economic research Cameron Kusher said the national media weekly advertised rent for the September 2023 quarter was $550 a week, up 3.8 per cent over the quarter, and 14.6 per cent compared to 2022 figures.
“The rental market remains extremely challenged, with renters facing significant competition for the limited stock available for rent,” Kusher said.
“These conditions have pushed the cost of renting much higher over the past year.”
Annucal change in median weekly advertised rents: September 2023
Kusher said the exodus of investors from the market was constraining rental stock on the market, which had a significant flow on effect.
“For first-home buyers, higher rents make it harder to save for a deposit, while borrowing capacities have reduced and prices continue to rise, making it difficult to enter into homeownership,” Kusher said.
“The rapid rate of migration to Australia is also exacerbating competition for rentals, with the majority of people arriving not owning property. The March 2023 quarter was the strongest quarter on record for net overseas migration.
“From here, we expect rents will continue to climb in the major capital cities due to persistent low supply and strong demand. Outside the major capital cities, we expect rental price growth to continue to slow, the availability of stock for rent to ease further and vacancy rates to
start drifting higher.
“These conditions highlight why it is so important to build more housing, particularly in the major capital cities. With home approvals and commencements at decade lows and this trend unlikely to change in the near-term, immediate solutions should focus on encouraging
investment and better utilisation of existing housing.
“Additionally, first-time buyers should be supported into homeownership, freeing up the rental stock they currently occupy.”
The report also showed the number of enquiries per property was rising, while the average number of days on the market had dropped to 20 days.
There is, however, an increasing demand on capital city properties, while regional rental demand had slowed.
