This article is from the Australian Property Journal archive
RENTAL growth is at its slowest rate in three years as conditions ease somewhat for renters, but growth will continue throughout 2025 and the market will remain much more heated than it was pre-pandemic.
New data from REA Group in its Rental Report for the December quarter showed national median rents rose by 6.9% to $620 per week – a far cry from the 20% annual growth seen in 2023, but still enough for renters to still feel the sting in their hip pocket and to keep housing at centre stage in the lead-up to the upcoming federal election.
The nation’s two largest markets, Sydney and Melbourne, saw no change in rents during the quarter, holding steady at $730 per week and $570 respectively.
“Over 2024, we saw rental price growth slow and the availability of properties improve, indicating that conditions are gradually beginning to ease for renters,” said REA Group executive manager, economics, Angus Moore.
He said that while rent prices outstripped that of inflation or wages growth in the December quarter, the pace of growth marked the slowest annual increase since late 2021.
“Despite some easing of rental pressures, the market remains far tighter than pre-pandemic levels, and availability is still strained. Rents are expected to keep rising in 2025, though at a more moderate pace,” he said.
Perth (up by 8.3%) and Adelaide (by 7.4%) recorded the greatest increases in weekly rental prices over the year to December. Perth, at $650 per week, has now surpassed Brisbane ($630 per week), while the median weekly rent in Adelaide ($580) now exceeds that of Melbourne ($570.
Median advertised rents across the combined capital cities recorded a 6.7% annual increase in December, to $640. Regional areas recorded stronger growth, at 10% over the year, to sit at $550 per week.
“We’re well and truly past that peak of the boom in rents, and we’re starting to trend back towards what would be normal growth in rental markets,” CoreLogic economist Kaytlin Ezzy recently told Australian Property Journal.
According to REA Group, renters had greater choice of properties in December compared to a year earlier, with the total number of rentals advertised 9.5% higher year-on-year. New rental listings on realestate.com.au were 4.6% higher over the six months to December compared to the same period in 2023, marking the busiest second half of the year for new rental listings since 2020.
The supply of properties available to rent grew in the very competitive markets of Adelaide (up by 22.1%) and Perth (by 16%) over the year to December. However, availability is still far below typical levels of the past decade.
Vacancy rates in the rental market remain crushingly low amid a national housing crisis. The federal government’s National Housing Accord is aiming to deliver 1.2 million “well-located” homes over five years in a bid to pump supply into the market.
Also helping pull back rental growth was a subtle slowdown in demand for rental properties. Median days on market increased from 19 days to 20 days over the year to December, helped further by average number of enquiries per rental listing falling from 22.3 in September to 19.5 in December. This was the largest annual fall in average enquiries per listing (a 19.1% drop) since March of 2020.
In annual terms, Sydney (down by 27.4%) and Melbourne (by 35.4%) led the decline in enquiries per rental listing, while Hobart (up 67.2%), Canberra (up 16.5%) and Darwin (up 31.3%), as well as most regional markets.
