In a time where the costs are increasing everywhere you turn, it is no surprise that Rental prices have increased. What is surprising is the rate of increase. Australia’s major cities have seen a staggering rise, with units experiencing a 17.6% spike nationally and houses seeing a 14.6% jump in the past year. To keep this in context, these are the highest annual rent increases ever recorded in Australia. The latest Domain Rent Report for Q4 2022 reveals an unprecedented seven consecutive quarters of rising house rents and six straight quarters of increasing unit rents, which is obviously good news for investors, and bad news for renters.
All regions of Australia have seen significant increases in house rents, with Perth experiencing a 15.2% hike, Brisbane 14.6%, Sydney 12.1%, and Adelaide 11.1% over the past year. Hobart had a 10% rise in house rents, Melbourne 7.9%, Darwin 5.1%, Canberra 3%, and regional centres overall saw an 11.1% increase.
In the prestigious suburb of Paradise Point on Queensland’s Gold Coast, house rents rose by a whopping 45.1 per cent.
The housing market is facing additional challenges due to a multitude of factors, such as the return of international students, increased migration and the slower-than-expected recovery in the tourism industry.
Many investors who may be facing financial difficulties due to rising interest rates may naturally pass these costs onto their tenants by increasing rent prices.
The high cost of borrowing and recent house price hikes have created a situation where many potential homebuyers are forced to either continue renting or enter the rental market for the first time. This influx of renters puts additional pressure on the rental market, resulting in higher demand for rental properties and potentially driving up rental prices. As borrowing costs remain high, many people are finding it increasingly difficult to secure a mortgage and purchase a home, leading them to look for rental properties as an alternative.
Whilst this is great news for investors, the only positive news for renters is that the rate of rental increase appears to have slowed. Bernice Cooper, of Paradise Point’s Mercer and Cooper Real Estate says “The rental market in areas such as Hope Island and its surrounds have experienced some of the most significant price hikes in the country. However, there are indications that the rental market may be reaching a point of stabilisation. While rental prices are still climbing, the rate of increase has slowed compared to the early months of 2022, this could suggest that the exceptional period of rapidly rising rents may be coming to an end”
Whilst rents might be stabilising, it’s important to note that this does not necessarily mean that rents will decrease; rather, the rate of increase may not be as dramatic as it has been in the past.
" The rental market in areas such as Hope Island and its surrounds have experienced some of the most significant price hikes in the country."
At Mercer and Cooper, we have a wealth of experience in the Australian Real Estate industry. With over 30 years in the business, we provide a wide range of services, including complete property management, appraisals, and all aspects of real estate sales. We take pride in being local property experts and are dedicated to providing our clients with the highest level of service. If you’re considering renting your property, please don’t hesitate to contact Mercer and Cooper today.
All information contained on this website is for your reference only. You should always make your own enquiries and seek independent legal advice in respect of any information about real estate law and the purchasing of real estate and related subjects. This website may contain hyperlinks to websites operated by parties other than Mercer & Cooper. Such hyperlinks are provided for reference only and Mercer & Cooper does not control such websites and is not responsible for their contents.