Weekly rental prices are averaging between $420 and $575 in the country’s major capital cities, with ACT the most expensive, according to a report by The Australian. That’s a 19.7% spike over the last five years.
As mentioned by the director of Economic Research at Proptrack, Cameron Kusher, the state of the market as of the moment was extremely right, and with Australia returning to “COVID normal”, it is expected that the market will continue to worsen as supply stays low while demand continues to grow. He implies:
“It’s a really tough market at the moment. We are seeing a lot of demand for property, especially since cities have opened – people going back to university and overseas travel. Even markets where we weren’t seeing as much growth, like Sydney and Melbourne, have started to pick up.”
In fact, Melbourne and Sydney have posted rent increases of 8.4% and 9%, respectively, for units over the past year, according to data from CoreLogic. Meanwhile, the vacancy rate for units in Melbourne fell to 1.9% in April from 5.7% a year prior, whereas the rate tumbled to 1.8% from 4.2% in the same period in Sydney.
Kusher additionally said that they have seen more investors selling properties out of the market, and most of those sales are going to private ownership and not investors. According to him, “some investors were selling to make a bit of a profit, but others were selling to use the funds to renovate their primary residences.”
“As interest rates rise, we expect property prices to fall, but we do not have that same expectation of rents. We should also see more interest in the residential property market going forward”, Kusher told The Australian.
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