Shortages in capital city rental markets have deepened over May with already low vacancy rates continuing to fall and high rents still rising strongly.
The national weekly median asking house rent has now increased by 16.8% over the past year to $537, with the April house vacancy rate steady at 1.2%.
Median asking rents for houses
All capitals continue to report significant increases in monthly asking house rents over the year ending May 2022, with Sydney still clearly the highest up 25.8% followed by Adelaide higher by 13.6% and Melbourne now up 11.8%.
Vacancy rates for houses remain generally at record low levels with only Canberra, Sydney and Melbourne remarkably above 1.0% but below 2% – and still falling.
Canberra continues to report the highest capital city weekly house rents steady at $700 over the month followed by Sydney rising sharply to $650 and Darwin at $620.
Brisbane continues to report the most affordable weekly house rents but is now higher over May to $460.
Median asking rents for units
Unit rentals have also recorded strong increases generally over the past year with the May national median weekly asking rent for units at $462 – an annual increase now of 16.1%, with the national vacancy rate for units steady at 2.1% over the month.
All capitals with the exception of Adelaide have reported increases in unit rents over the year to May with Sydney now the leading performer higher by 20.0% followed by Darwin up by 16.3% and Hobart higher by 12.5%.
Capital city vacancy rates for units generally remained at low levels over May, with Melbourne the highest but down again to 2.8%.
Similar to houses, Canberra again reported the highest weekly asking rents for units over May steady at $550, with Adelaide the most affordable and falling to $380.
Demand for rental homes will continue to increase over 2022 driven by strong economies, the easing of covid restrictions and concerns, and the return of high levels of migration and students – all set to exacerbate a chronic undersupply of rental accommodation.
Higher rents and strengthening returns for investors are a clear consequence of a current clear and likely extreme mismatch between supply and demand in home rental markets.
Higher mortgage interest rates for investors are also likely to be passed on to tenants providing more upward pressure on already high and generally rising rents.