Australian rental increases the highest on record in capital cities

Australian capital cities have experienced the strongest annual rental increase in history, says CoreLogic.

Aussie renters have been feeling the brunt of the cash rate increases as landlords pass on the rates to their tenants. All across the country renters have seen their rent increase by an average of $52 per week or $2,727 per year.

According to a new CoreLogic report, the national dwelling rental index increased by 0.8% to 2.8% over the last three months. And the combined rental increases in the capital cities went up 11.7% in the last year.

The uptick in rental prices can be attributed to several factors besides the cash rate hikes. Notably, the increase in immigration after two years of closed borders, which includes international students and new migrants, has created a massive supply and demand issue. Throw in the lack of new constructions and suddenly there is a scarcity of available and affordable places to rent.

The median rent in Australia May 2023 (Source: CoreLogic)

“The total supply of capital city rental listings was -20.9% below the level recorded this time last year and -39.8% below the five-year average,” the report notes.

“With the exception of Hobart and Canberra, vacancy rates across the capitals remain near record lows, and well below the 3% to 5% average rate considered indicative of a balanced rental market.”

CoreLogic says it's unlikely there’ll be a relief for renters for the short to medium term  as rental supply is expected to remain low due to the lack of new unit construction approvals.

For now, all renters can do is sit tight or consider buying their own property. If what you pay monthly for rent is equivalent to a mortgage repayment it might be better to put that money towards having your own home.

If you don’t know where to start, check out Mozo’s home loan guides or compare home loans below to see what you can afford.