According to CoreLogic’s Quarterly Rental Review for quarter-two 2022, the national rental index increased by 0.9% in the month to June and 2.9% over the June quarter.
This represents a 30 basis point increase through the quarter compared to last quarter.
Latest figures show the rental market has continued to tighten as national vacancy rates fell to 1.2% from 2.2% this time last year.
Across the capital cities, dwelling rents are 9.1% higher while regional areas are up 10.8% compared to June 2021.
Kaytlin Ezzy, CoreLogic research analyst, said the recent upwards trend in rents is due to a combination of low supply and high demand.
“This sustained period of strong rental growth has seen national dwellings record the highest annual growth in rental values since December 2008, when rental demand was supported by record levels of international migration,” Ms Ezzy said.
“However, the current surge in rental demand has occurred largely in the absence of overseas migration and has instead been driven by factors including low supply and a decrease in the average household size which has amplified domestic rental demand over the COVID period to date.”
Melbourne replaces Adelaide as Australia’s most affordable rental market
Strong growth in Adelaide rents combined with weaker rental growth in Melbourne saw the City of Churches hand over the crown of Australia’s most affordable capital city rental market to Melbourne.
For context, Adelaide dwelling rents increased 4.3% for the quarter, the strongest quarterly rental growth recorded since CoreLogic commenced in 2005.
The average property rent in Melbourne sits at $480 per week while Adelaide’s increased to $492. Perth, Brisbane, and Hobart followed with $515, $547, and $549 respectively.
Canberra maintained its position as the country’s most expensive capital city rental market with the typical dwelling renting for $690 per week.
While Sydney came in second with a median rental value of $643 per week, followed by Darwin with $565.
| Region | Median rent | Change in rent for the month (all dwellings) | Current vacancy rate (all dwellings) |
| Sydney | $643 | 1.0% | 1.6% |
| Melbourne | $480 | 0.8% | 1.5% |
| Brisbane | $547 | 1.4% | 0.8% |
| Adelaide | $492 | 1.5% | 0.3% |
| Perth | $515 | 0.8% | 0.9% |
| Hobart | $549 | 0.2% | 1.2% |
| Darwin | $565 | 1.1% | 1.1% |
| Canberra | $690 | 0.4% | 1.1% |
| National | $526 | 0.9% | 1.2% |
High rental demand to continue
CoreLogic research director Tim Lawless suggests rental demand will rise as overseas migration begins to pick up once again.
“With the exception of Darwin, the strong rental growth seen over the past year has led dwelling rents across all of the capitals to reach new record highs,” Mr Lawless said.
“Despite growing affordability concerns, rental markets are expected to remain tight for some time partly due to a shortage of supply following a long period of low investment activity between 2015 and 2021, but also due to renewed rental demand as international migration recovers.”
“Worsening affordability could have a negative impact on rental demand as more people try to minimise costs by maximising occupancy rates or reforming larger households.
“However, this will likely be offset by additional rental demand as international migration returns to pre-COVID levels.”
See Also: Where is it now cheaper to buy than rent?
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