Key takeaways
Nationally rents have been up 8.3% in 2023.
Development in unit rents (10.2%) has outpaced the rise in home rents (7.5%) this yr.
We will additionally see some vital variations throughout the broad areas of the nation.
Rental development throughout the mixed regional areas of Australia slowed to 4.3% in 2023, the smallest calendar yr rise since earlier than the pandemic.
Contemplating we’re but to see any materials response in rental provide, development in rents is prone to stay above common in 2024.
Nationally, rents have been up 8.3% in 2023, a discount from the 9.5% rise recorded final yr and 9.6% rise in 2021.
Regardless of the slowdown in and your hire development, final yr outcomes are nonetheless greater than 4 instances the pre-Covid decade common of two% each year
In greenback phrases, the annual rise in dwelling rents equates to roughly $46 extra per week primarily based on the median rental worth.
The headline numbers masks the range that has emerged throughout rental markets by means of 2023, each throughout the broad housing varieties and geographically.
Supply: Corelogic 2nd January 2024
Whereas development in unit rents (10.2%) has outpaced the rise in home rents (7.5%) this yr, the annual development is clearly slowing throughout most unit markets.
The extra pronounced slowdown in unit rental development might replicate slower web abroad migration by means of the second half of the yr, particularly scholar arrivals that are extremely seasonal.
It may be a attainable signal that extra unit renters are reaching their affordability ceiling as rents exceed how a lot they’re keen or capable of pay.
We will additionally see some vital variations throughout the broad areas of the nation.
Perth is a transparent outlier for rental development, with home and unit rents main the nation in 2023, with no indicators of an easing within the annual development price.
Perth unit rents rose by 16.5%, or roughly $80 per week on the median worth over the yr, whereas home rents have been up 12.9% or roughly $73 per week.
On the different finish of the spectrum are Hobart and Canberra, the place rents fell over the yr.
Regional hire development slows
Rental development throughout the mixed regional areas of Australia slowed to 4.3% in 2023, the smallest calendar yr rise since earlier than the pandemic.
Slower rental development throughout regional markets might be attributed to a normalisation in regional migration tendencies which has taken some warmth out of rental demand, in addition to development easing on inherently increased hire values.
Outlook for 2024
Contemplating we’re but to see any materials response in rental provide, development in rents is prone to stay above common in 2024.
Nonetheless, we might nicely see an additional slowdown in rental development as affordability pressures drive structural modifications in rental demand.
This might embody a carry in common family dimension, as group households re-form and multi-generational households turning into extra frequent,”
