Wire · Echonomia Post
Add as a preferred source on Google Realestate.com.au senior economic analyst Megan Lieu. ANALYSIS Rental prices have hit a new record high, and you’ve really got to wonder, how much more rent can people pay? A national snapshot by realestate.com.au showed that median advertised rents rose 1.5 per cent over the past quarter and 5.5 per cent over the year, to now sit at $675 a week.
In capital cities, rents grew by 1.4 per cent over the quarter and 7.7 per cent for the year, to hit $700 a week. Since Covid, rents have risen astronomically. Back in 2021, someone from Brisbane was paying $13,000 less per year in rent on average than they are now.
MORE: Brisbane tenants face $2600 rent hike In Sydney, they were paying $15,600 less per year than now. A renter today in Perth needs to find an extra $16,120 each year than five years ago. That’s a difference of more than $300 a week.
Crowds of tenants at open inspections have become common as vacancy rates remain tight. But it’s not just renters feeling the pain. It’s also mortgage holders.
Because the more rents go up, the further borrowers are from the next RBA rate cut. That’s because, along with construction costs, asking rents are one of the key inflation measures for housing. And housing is the main category in the consumer price index (CPI), making up nearly a quarter of the weighting of the inflation that the RBA takes into account when considering what to do with the cash rate.
MORE: Melbourne tenants slugged massive yearly rental increase Annually, rental growth is well and truly outpacing yearly inflation, which will continue to put pressure on the RBA to hike rates. And hiked rates of course mean landlords are likely to raise rents further to cover their extra borrowing costs ... which means rents will keep outpacing yearly inflation, which will continue to put pressure on the RBA to hike rates. It’s an inflationary doom loop!
But before we completely despair, there may be a tiny crack of light starting to emanate from the long lease of darkness. The RBA may have no choice but to hike rates further. Picture: John Appleyard The most recent rate of rental growth actually represents a slowdown.
The 1.5 per cent growth for the quarter was down from 2.3 per cent in the June quarter. Meanwhile, the national vacancy rate crept up by 0.2 per cent over the quarter to reach 1.5 per cent, the highest level since 2022. MORE: Adelaide rents hit new peak A vacancy rate increasing as construction fails to keep pace with population growth could potentially be a sign that more renters have been able to purchase property.
Or it could simply mean that fewer people are able to keep paying more rent and have exited the market. Whether they are now sharehousing with greater numbers of people, living with family, or have left the country altogether is a mystery. But we do know demand on emergency accommodation has skyrocketed in recent times and we hear about ever growing numbers of gainfully employed people living in cars while they search for a permanent rental.
That vacancy rate is still nowhere near high enough. It needs to get to 3 per cent to be what experts consider a “balanced market” between landlords and tenants. And then keep growing further if renters are to be in possession of meaningful “choice”.
Realestate.com.au senior economic analyst Megan Lieu said conditions remain tough for tenants. Not many of these around lately. MORE: Sydney rent now ‘worst on record’ “Rental availability improved across all capital cities and regional areas compared to the June 2026 quarter,” Ms Lieu said.
“However, conditions remain extremely tight in Perth, Hobart and Adelaide, with vacancies at or below 1.0 per cent. “In order for rent prices to moderate or fall we would have to see a large increase in rental supply which we’re not really seeing at the moment.” Help us improve your reading experience Got a minute? Your feedback will help us build a better experience for you.
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Source: Real Estate
