The Latest CoreLogic’s Rental Market Update
Key takeaways
Nationally rents were up 8.3% in 2023.
Growth in unit rents (10.2%) has outpaced the rise in house rents (7.5%) this year.
We can also see some significant differences across the broad regions of the country.
Rental growth across the combined regional areas of Australia slowed to 4.3% in 2023, the smallest calendar year rise since before the pandemic.
Considering we are yet to see any material response in rental supply, growth in rents is likely to remain above average in 2024.
Nationally, rents were up 8.3% in 2023, a reduction from the 9.5% rise recorded last year and 9.6% rise in 2021.
Despite the slowdown in and your rent growth, last year results are still more than four times the pre-Covid decade average of 2% per annum
In dollar terms, the annual rise in dwelling rents equates to approximately $46 more per week based on the median rental value.
The headline numbers mask the diversity that has emerged across rental markets through 2023, both across the broad housing types and geographically.
Source: Corelogic 2nd January 2024
While growth in unit rents (10.2%) has outpaced the rise in house rents (7.5%) this year, the annual trend is clearly slowing across most unit markets.
The more pronounced slowdown in unit rental growth could reflect slower net overseas migration through the second half of the year, especially student arrivals which are highly seasonal.
It could also be a possible sign that more unit renters are reaching their affordability ceiling as rents exceed how much they are willing or able to pay.
We can also see some significant differences across the broad regions of the country.
Perth is a clear outlier for rental growth, with house and unit rents leading the nation in 2023, with no signs of an easing in the annual growth rate.
Perth unit rents rose by 16.5%, or approximately $80 per week on the median value over the year, while house rents were up 12.9% or roughly $73 per week.
At the other end of the spectrum are Hobart and Canberra, where rents fell over the year.
Regional rent growth slows
Rental growth across the combined regional areas of Australia slowed to 4.3% in 2023, the smallest calendar year rise since before the pandemic.
Slower rental growth across regional markets can be attributed to a normalisation in regional migration trends which has taken some heat out of rental demand, as well as growth easing on inherently higher rent values.
Outlook for 2024
Considering we are yet to see any material response in rental supply, growth in rents is likely to remain above average in 2024.
However, we could well see a further slowdown in rental growth as affordability pressures drive structural changes in rental demand.
This could include a lift in average household size, as group households re-form and multi-generational households becoming more common,”
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