There was no Christmas miracle for renters as rent hikes continued into the holiday period before the market’s busiest time of year.
The latest PropTrack Market Insight report found the median national rent has continued its meteoric rise, increasing 1.8 per cent over the December quarter to $580 per week.
This is an 11.5 per cent increase compared to the previous year, which means rents are $60 more expensive a week than they were in early 2023.
Much to the chagrin of urban renters, capital city prices were 13.2 per cent more than the year before, bringing the median to $600 a week as units in Sydney, Melbourne and Brisbane increased by 15 to 17 per cent.
Perth fared no better, with median rents surging 20 per cent in a year.
With the second tightest rental vacancy rate behind Adelaide, Perth’s median rent is now 66 per cent higher than it was before the COVID-19 pandemic.
According to PropTrack economist Angus Moore, the short-term situation is unlikely to improve.
“Rental markets are extremely challenging for renters, with rents continuing to grow very quickly across much of the country,” he said.
“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.”
But Mr Moore says renters may find relief on the horizon.
“The fact that we’re starting to see rent growth slow could be a sign that we’re going to start to see that kind of filtering out more broadly – maybe later in the year,” he told AAP.
“But it’s certainly not a guarantee.”
Regional renters have already experienced some reprieve with their rents having plateaued at $500 per week since June.
But Western Australia and Queensland were home to the highest non-metropolitan rents at a median $580 per week – a 16.7 per cent and 11.5 per cent increase on the previous year.
It comes as new data revealed the number of approvals for new private sector houses fell by 1.7 per cent in November.
Figures from the Australian Bureau of Statistics showed the total dwelling approvals rose by 1.6 per cent during the month, but well down on the 7.2 per cent rise in October.
Private sector dwellings that were apartments, townhouses or terrace houses had a 6.7 per cent increase for November.
But the number of building approvals for the first five months of 2023/24 is down compared to the same period in 2022/23.
Between July and November in 2023, there were 70,900 dwellings approved, compared to the 81,954 in the same five-month period in 2022.
The value of total building approvals during November fell by 9.2 per cent in November, after it had risen by 8.1 per cent in October.
Housing Industry Association chief economist Tim Reardon said the low number of homes approved in 2023 would lead to a slowdown in construction, which has Master Builders Australia’s deputy executive Shaun Schmitke “deeply concerned”.
“We know the cost-of-living crisis is currently being exacerbated by stubborn inflationary impacts in housing,” he said.
“We hope at the top of all government action lists is how to reduce the time and cost pressures around home building.”
While CommBank economists say there are tough times ahead for builders and suppliers, there were some “green shoots emerging” as the trend measure of approvals continues to increase.
Kat Wong and Andrew Brown
(Australian Associated Press)
