Urgent Need of 70,000 Rentals to Stabilise Housing Market | Insights from Domain's Rental Report

🏡Landlords' Market Continues: Australia remains a strong landlords' market.

📈 Rental Demand Surpasses Supply: The country needs up to 70,000 additional rentals to balance the market, resulting in a record-low vacancy rate of 0.8%.

💰 Record-High Rents: House and unit rents in the combined capitals reached a record high of $600 per week, with a 13% and 23% increase from the previous year, respectively.

🌏 Regional Variances: Different cities experience varying rental landscapes, with Sydney, Melbourne, Brisbane, Adelaide, and Perth all witnessing record-high rents.

📉 Easing Rent Growth: While rent growth is slowing compared to the extreme hikes of 2022, it remains elevated. Over the September quarter, rents increased by 3.4%.

🏙️ City Affordability Shift: Melbourne loses its position as the most affordable city for renting a house, replaced by Hobart. Brisbane, jointly with Canberra, becomes the second most expensive city for renting a unit.

🌐 Migration and Demographics Impact: Variations in supply levels and demographic shifts influence rental dynamics. Capital cities with the largest net overseas migration, such as Melbourne, experience a reacceleration in rents.

💡 Affordability Challenges: Rent gains are decelerating, suggesting an affordability ceiling. Tenant budgets struggle to keep up with rising rents and living costs.

🔍 Factors Contributing to Rental Market Challenges:

• Development undersupply and investor selling impact rental supply.

• Policies like potential higher taxes in Queensland and Victoria may deter investors.

• Initiatives, like the proposed short-stay accommodation levy in Victoria, could affect investor sentiment.

🚀 Addressing Rental Market Challenges: To achieve a healthy vacancy rate and balance the market, Australia needs 40,000 to 70,000 additional rentals. Encouraging investor participation through supportive policies is crucial amid increasing demand.

For a detailed analysis, read Domain's comprehensive rental report.