Rental prices soar over last 12 months: PropTrack

The latest PropTrack market insight has revealed the rental situation across Australia for the December quarter 2023 – pointing to surging rents across the year that was.

Sydney, Melbourne, and Perth led the charge price-wise over the year, reporting rental growth of 13.6 per cent, 14.6 per cent, and 12.7 per cent, respectively, when it came to houses.

Adelaide was not far behind, with advertised rental prices up by 12 per cent.

All in all, the combined capital cities saw advertised rents for houses climb by 12.7 per cent over the 12-month period, bringing the average advertised rent to $600 per week.

PropTrack economist Angus Moore has pointed to strong demand and extremely low vacancy rates as fuelling the increases.

While acknowledging the rent price growth as “very fast”, Mr Moore did state that “the good news for renters is that it was the slowest pace of annual growth since early 2022.”

“There are some signs that rent growth may be slowing and some relief on the horizon. While rents are still growing very quickly, rent growth in 2023 was slower across the combined capital cities compared to 2022.

Looking ahead, he forecast a “slightly better” outlook – especially for the regions, which saw average growth of just 6 per cent across the country in the 12-month period.

“Median advertised rents have been stable for two consecutive quarters, sitting at $500 per week since June,” he flagged.

“As we head into what is typically the busiest time of year for rental markets in January, renters will, unfortunately, continue to face growing rents. There may be some relief on the horizon, with signs that growth is starting to ease.”

A property report released by KPMG found that house prices are expected to rise nationally by 4.9 per cent over the next nine months and then surge by 9.4 per cent in the year to June 2025.

Units, similarly, are projected to see an average rise of 3.1 per cent by next June, then a 6 per cent increase in the next 12 months.

The report outlined various forces impacting property prices, with factors putting pressure on either side of the scale. Ultimately, however, the research found that limited supply and high demand will greatly outweigh interest rates, with the latter serving almost to encourage buying, as increasing rental prices off the back of landlords’ attempts to recoup costs push renters who can buy into the market.

“Despite high interest rates, constrained supply will likely dominate the factors influencing property prices in the short term and result in continued price gains in most markets during FY24,” Dr Brendan Rynne, KPMG’s chief economist, said.

“House and unit prices will accelerate further in the next financial year as dwelling supply continues to be limited, due to scarcity of available land, falling levels of approvals, and slower or more costly construction activity.”

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