At a time when tenants across the state are already experiencing hardships, a surge in rental prices in the coming months will hurt even more.
According to latest research by buyers agency InvestorKit, low vacancy rates has triggered strong growth in rental prices across the country.
The report analysed more than 300 regions across Australia to find those displaying high rental pressure where annual rents are expected to rise by $2600 to $5200 per region over the next year to 24 months. It did so by reviewing each region’s rental demand and supply indicators, long-term and short-term market pressure, and rental price trends.
The SA areas on the list experiencing rental crisis – defined as having a vacancy rate below 1 per cent or lower – included Greater Adelaide region, Barossa and the Yorke Peninsula.
According to report author and Investorkit founder Arjun Paliwal, Greater Adelaide area has an extremely low vacancy rate of 0.3 per cent.
The regions currently experiencing the lowest vacancy rates are Playford (0.07 per cent vacancy), Onkaparinga (0.09 per cent), and Marion (0.09 per cent).
“Rent prices in Greater Adelaide area have increased 11.3 per cent over the past year and 32.8 per cent over the past decade,” Mr Paliwal said.
“As supply levels keep declining, the heightened market pressure is likely to push up rent prices further. Tenants in these areas will have to shell out anywhere from $50 to $100 a week extra in the coming months,” he said.
“Another reason for the rental prices going up is that these places offer an attractive lifestyle and have been affordable for a while, from a rent perspective. It is only now that prices are catching up after years of slow growth. Also, supply of rental stock has been extremely restricted here.”
While Barossa’s vacancy rate has always been low, it has declined even further since early 2020, currently sitting at an extremely low 0.2 per cent, the report stated. This has led to the region’s annual increase in rent price levels of 7.6 per cent.
Renters in the Yoke Peninsula will also have to brace for steeper rents with the vacancy rate hovering around 0.3 per cent since the beginning of 2021. The low vacancy rate has led to rent prices increasing by 9.3 per cent over the past year.
“As supply is staying at a fairly low level, rent is likely to be pushed further up by the high market pressure,” Mr Paliwal said.
Other regions in the top 20 list included Brisbane, Perth, Hobart, Canberra, Devonport & Burnie-Ulvertstone in QLD, Nerang & Bundaberg in QLD, Maryborough in QLD, Buderim in QLD, Toowoomba in QLD, Queanbeyan in ACT, Lake Macquarie – East & Kiama-Shellharbour in NSW, Wagga Wagga in NSW, Warrnambool and Shepparton in Victoria.
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