Australians hit with double-digit rent increases

Despite the signs of easing, more than 40% of Australians house and unit markets saw double-digit rent increase in the past year, according to CoreLogic’s national rental index.

However, in May rents went up by 0.8% compared to the 0.9% and 1% increase in April and March, respectively.

And the slowdown in the monthly growth rate had contributed to a fall in the annual trend, which dipped below double digits for the first time in 10 months, with rents nationally increasing 9.9% over the 12 months to May.

According to CoreLogic economist Kaytlin Ezzy, this scenario was largely being driven by a slowdown in regional markets, where rents increased 0.3% over the month, down from a record monthly growth rate of 1.2% in March 2022.

“Regional rental growth has slowed dramatically from a year ago while capital city rents were up 1.0% in May,” she said.

“When you break that figure down further by property type, we can see the unit sector is under the greatest pressure, with rents increasing at a faster rate than houses due to their relative affordability.”

In May, capital city house rents increased 0.9% compared to a 1.4% lift for units.

The data also showed that in the past year rents increases were observed in every capital and rest of state region except for Canberra which posted a 1.9% decline.

“Canberra was previously the country’s most expensive rental city until Sydney overtook it in December,” Ezzy noted.

“The softening rental conditions in the ACT is likely due to there being more stock on the market. Canberra’s vacancy rate has increased from 0.7% in March 2022 to 2.2%, putting it second behind Hobart (2.7%).

“More stock means tenants have more choice and potentially more power when negotiating their rent.”