Renters across the country are set to struggle as new data suggests rental prices are set to surge from $2600 to $5200 over the next two years.
A report by buyer’s agency InvestorKit looked at over 300 regions across Australia to analyse rental pressures in both regional and urban areas.
It found that as vacancy rates have dropped to their lowest point since 2006, rental prices have been quickly growing across the country – with capital city rental prices increasing 11 per cent over the past year and regional prices growing 13 per cent.
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In NSW, this meant that coastal regions such as Lake Macquarie – and in particular the East of Lake Macquarie – were seeing a 15.6 per cent increase in rent prices and a 36.8 per cent rise over the past decade.
InvestorKit founder and head of research Arjun Paliwal said the country was facing a nationwide rental crisis exacerbated by a range of factors.
“A rental crisis is often defined by vacancy rates at 1 per cent or lower, so its concerning to see this continuing to worsen,” Mr Paliwal said.
“We’re currently at 0.7 per cent – 41 per cent lower than 12 months ago when we were at 1.2 per cent. Most of the 20 regions chosen in our report have vacancy rates lower than the national average, and the majority are even lower than 0.3 per cent.”
“These record-low vacancy rates are due to increasing demand and limited supply, caused by factors including greater housing demand, particularly for detached houses, due to the work-from-home trend and desire for a better lifestyle: the recent housing boom and prices forcing people to stay in the rental market longer; Gen Ys moving out of home, shared houses or upsizing; strong population growth in regional areas; and a fall in property investor activity over recent years.”
The vacancy rate of Wagga Wagga has been trending downward since the end of 2019, sitting at 0.4 per cent in 2022.
Mr Paliwal says the low vacancy rate in the region has led to its 14.3 per cent increase in the rent level over the past year – with rent levels growing 29 per cent over the past decade.
It’s a similar story for capital cities in other states; the Greater Adelaide area has a low vacancy rate of 0.3 per cent and has seen rent prices increase by 11 per cent over the past year.
As Mr Paliwal explains, one capital city’s performance can have an impact on another’s.
“Adelaide’s increasing employment opportunities, fast-growing population paired with its moderate supply level leads us to believe Perth’s rent level with continue to surge over the next 12-24 months.”
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