Rent Growth Slowdown Brings Tenants Glimmer of Hope

Capital city rents surged in 2023, led by Sydney, Melbourne and Perth but there’s a glimmer of hope for renters.

According to PropTrack, rents in the capital cities surged 13.2 per cent compared to the same time a year ago, bringing them to $600 a week.

While this was remarkably fast growth, it was the slowest pace of annual growth since early 2022, according to PropTrack.

Nationally, median advertised rents nationally rose 1.8 per cent during the December quarter to $580 a week, bringing rents up 11.5 per cent, or $60 a week, compared to a year ago.

Units in Sydney, Melbourne and Brisbane had particularly sharp increases in the past year, up 15 per cent to 17 per cent, while Perth had the fastest rent growth for the past year, reflecting its low rental vacancy rate—just 0.7 per cent in November.

Perth had recorded rapid growth for a few years and median advertised rents were now up 66 per cent compared to pre-pandemic, PropTrack said.

“In contrast, regional rental markets have had more moderate growth,” a spokesperson said.

“Rents were flat across regional areas in the December quarter and have been stable at $500 per week since June.

“Rental markets are extremely challenging for renters, with rents continuing to grow very quickly across much of the country amid strong demand and very low vacancy rates.

PropTrack rental prices, December quarter 2023

▲ Source: PropTrack

“Rents are growing at double-digit rates in many capitals, with Sydney, Melbourne and especially Perth renters facing very strong growth.

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

“The outlook is slightly better for regional renters. Median advertised rents have been stable for two consecutive quarters.”

“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.”