PHOTO: FILE
National Rental Prices See Slowest Growth in Four Years
Struggling renters across Australia can finally breathe a sigh of relief as rental prices show signs of stabilizing. New data from the REA Group Market Insight indicates that the rental market is beginning to balance after significant increases in 2023 and early 2024.
Stabilizing Rental Prices in Sydney and Melbourne
Sydney and Melbourne, Australia’s two largest rental markets, have experienced a six-month freeze in median weekly rents. Sydney’s median rent remains at $730 per week, while Melbourne’s median rent is steady at $570 per week.
This stagnation is a welcome reprieve for tenants who endured sharp increases over the previous years. In 2023, Sydney rents skyrocketed by 16.7%, while Melbourne’s grew by 14.5%. By comparison, 2024 saw much slower annual growth rates of 4.3% and 3.6%, respectively.
PropTrack senior economist Paul Ryan noted that rental demand is beginning to moderate, bringing some relief to the market.
“We are starting to see balance come back to the rental market,” Ryan said. “While there is still demand, landlords are now having to be realistic relative to people’s income.”
National Trends Show Slow Growth
Nationally, rental prices increased by 6.9% year-on-year to December 2024, marking the slowest growth since late 2021. Elevated investor activity and longer leasing times have contributed to the easing pressure on the rental market.
Despite this moderation, Sydney remains the most expensive city for renters. According to Ryan, many tenants still devote a significant portion of their income to rent.
Regional Insights
- Melbourne: Remains the most affordable major city with a median rent of $570 per week. The city’s robust housing construction has helped keep prices in check.
- Brisbane: Median rent is $630, up 5% over the past year. The city continues to attract residents due to its lifestyle and affordability.
- Adelaide: Rents increased by 7.4% year-on-year but stagnated in the last quarter, with a median rent of $580.
- Perth: The strongest annual growth among major cities, with an 8.3% increase. Median rent now sits at $650, driven by strong demand and slower home building.
- Hobart: Median rent remains at $520, making it one of the most affordable capitals.
- ACT: Median rent is $620, supported by consistent new housing developments.
Outlook for 2025
While the immediate pressure on renters has eased, experts caution that January and February could see modest increases due to seasonal factors, such as university students and job relocations. However, beyond this period, moderate growth is expected to continue.
Ryan explained, “Melbourne’s ongoing housing construction and the ACT’s consistent new builds have kept rents stable. Conversely, markets like Brisbane and Perth still face demand-driven increases.”
For cities like Brisbane, Adelaide, and Perth, affordability has been a key driver of population growth, though rising rents may start to limit this appeal.
The rental market’s slowdown in growth marks a turning point for struggling tenants, providing much-needed relief after years of sharp increases. While challenges remain, particularly in high-demand markets like Sydney and Brisbane, the easing pace of rent hikes offers hope for greater affordability and stability in 2025.
SOURCE: NEWS.COM.AU