Real Estate Investment:Today

A bleak outlook for tenants with rising rentals

It’s tough out there for tenants.

There’s a shortage of rental properties available, both houses and apartments, with intense competition for the limited supply driving up rentals around Australia.

And there’s no relief in sight.

According to Dr Andrew Wilson’s My Housing Market, the already low vacancy rates continued to fall over May, driving rents even higher.

The national weekly median asking house rent increased by 16.8% over the past year to $537, with the May house vacancy rate steady at 1.2%.

Dr Wilson reported that vacancy rates for houses were at record low levels in Sydney causing rentals to surge by 25.8% over the year.

On the other hand, Brisbane continues to report the most affordable weekly house rents, but even these have increased by 7% over the year.

Apartment rents also rising

Unit rentals have also recorded strong increases with apartment rents up 16.1% over the last year as decreasing housing rental affordability has forced many tenants to consider apartment living.

Median Asking Rents Units May 2022

Why are rentals growing so strongly?

It all has to do with supply and demand, and at present, the competition for rental accommodation is high with tenants having very little choice with a number of available rentals trending lower month by month.

Why is supply so limited?

It all started in 2017 when APRA restricted funding to investors, meaning the number of investors providing rental accommodation decreased.

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