A new report has revealed weekly rental prices have shot up, rising 4.7% over the three months to the end of December 2021, while supply reached historic lows.
REA's PropTrack Rental Report for January 2022 revealed the surge is driven by rental prices in regional Australia, which are 5% higher over the last quarter and 10.5% higher year-on-year.
The report said new rental listings recorded a monthly fall of 27.2% in December 2021 to reach the lowest number of new rental listings since April 2010, while demand continues to rise.
The report focusses on six key metrics: rental prices, rental yields, new rental listings, total rental listings, rental days on site and engaged renters per listing.
PropTrack Director of Economic Research and report author, Cameron Kusher, said the national rental market is set to remain tight over the coming months.
"With international borders re-opening, it’s likely that the coming months will see the excess rental stock in inner city areas reduce as migrants come back and occupy those properties," he said.
"The re-opened borders could provide further challenges as the return of travelers, both domestically and internationally, sees landlords contemplate moving their rental properties from long-term leases to short-term letting.
"The ongoing tight rental conditions are also expected to result in further increases to rental rates."
Key report findings:
- Weekly rents have increased across all capital city and regional markets over the last year aside from Melbourne (-2.4%) and are unchanged in Sydney.
- House rental prices have jumped up by 2.2% over the quarter and 7% year-on-year. Unit rents increased by just 1.2% in the quarter but remain unchanged over the past year.
- New rental listings have recorded the largest year-on-year falls in regional WA (-26.9%), Melbourne (-19.3%) and regional SA (-18.9%), while the only regions to record increases were Darwin (12.1%), regional NT (13.4%) and Canberra (5.8%).
Despite the poor results for renters, Mr Kusher said people moving back to the city could offer some reprieve for regional areas.
"In regional areas, we may start to see some pressure ease as people make the shift back to the city or they purchase homes locally after having rented for a while and having decided to stay," he said.
"In a positive for renters, property investment will lift over the coming year. With more investors purchasing properties this will in-turn add to the rental supply and hopefully ease some of the surging rental prices."
"Rental prices surge as new stock hits decade low: REA" was originally published on Savings.com.au and was republished with permission.