Are We Heading for GFC-Level Rent Hikes Again?

We’ve seen this before, back in 2007–2008, right as the Global Financial Crisis unfolded.

Rents were skyrocketing, vacancy rates were plummeting, and affordability was vanishing.

Now, a new analysis from Money.com.au suggests we may be heading for a repeat performance.

Over the past two years, Australian rents have jumped 14.2%—more than double the overall inflation rate of 6.6%.

It’s the fastest pace we’ve seen since those GFC days, and all signs point to more pain ahead for tenants.

But what’s driving this surge?

And more importantly, what does it mean for investors, renters, and the broader housing market?

Let’s unpack it.

A two-speed recovery: homeowners vs. renters

According to Mansour Soltani, Property Expert at Money.com.au, while inflation is easing and the Reserve Bank’s targets are finally back in sight, renters are getting left behind.

He further said:

“The general rate of inflation is easing and back within the RBA’s target range, which is good news for homeowners desperate for more rate relief.

But rents, as they relate to overall inflation, keep rising at a faster rate.

So there’s a growing divide between homeowners who are likely to see another rate cut soon and lower mortgage repayments, and renters who will continue bearing the brunt of the housing crisis."

And that divide is getting wider.

While owner-occupiers are starting to see some light at the end of the tunnel, renters are facing rental inflation that’s compounding.

It’s not just 7.3% in 2023 and 6.4% in 2024, it’s the snowball effect that comes with back-to-back annual increases.

If current trends hold, we could be staring down another 18% rise by 2030.

Echoes of the GFC

Back during the GFC, rental price growth peaked at 8.4% in 2008.

And it took six long years before rental inflation dropped back below general inflation.

Soltani warns we could be in for an even longer haul this time around:

“The last time we saw rent rises like this was during the GFC, and back then, it took years for the market to stabilise. If that’s anything to go by, we could be in for a long stretch of above-average rent growth.

With population growth, record-low vacancy rates in capital cities, and limited housing supply, it could take even longer this time around. ”

This time, the fundamentals are even more strained.

We’re dealing with a higher intake of migrants, tighter construction pipelines, chronic planning delays, and investor uncertainty around regulatory settings.

Where rents are rising fastest

The national average tells one story but the city-level data paints a more granular (and at times, more concerning) picture:

• Perth tops the list with a 19.9% increase over two years.

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• Brisbane follows at 15.8%.

• Sydney is close behind at 15.4%.

Meanwhile, Melbourne saw a 12.7% lift, Adelaide 12.2%, Darwin 7.3%, and Canberra just 3%.

Interestingly, Hobart bucked the trend with a 1.5% decline.

This highlights the need for property investors to zoom in beyond headline numbers.

It’s not about whether rents are rising, but where the pressure is most intense and where rental yields may follow.

Renters ready to pack up

The rental crisis is now shaping behaviour in a big way.

Nearly half (47%) of renters surveyed by Money.com.au said they’d relocate to a cheaper suburb or city if they had to.

An additional 14% are actively planning their move right now.

Gen Z renters are leading the charge (17%), followed by Gen X (15%).

This isn’t just a human story, it’s also a major signal to property investors.

Tenants are chasing affordability, which is putting new pressure on outer suburban and regional rental markets.

If you own property in those zones or are looking to enter, there may be opportunities for consistent yields and low vacancy.

What this means for property investors

For property investors, this is one of those rare windows where yield and capital growth potential are moving in sync—at least in well-located, undersupplied markets.

High rents + low vacancies = healthy cash flow.

But don’t be lulled into thinking all boats rise with the tide.

As I’ve said countless times, owning the right property in the right location is what counts.

The rising tide won’t save poorly located, sub-par investment stock.

It’s about strategic acquisition, long-term thinking, and holding through the inevitable cycles.

Final thoughts

The parallels with the GFC are important, but the structural problems today are arguably worse.

Back then, we didn’t have this scale of population growth or housing undersupply.

That’s why I believe this rental squeeze may be more prolonged and more severe.

For investors, that’s both a warning and an opportunity.

As always, strategic advice, smart portfolio planning, and a long-term mindset are the keys to navigating what lies ahead.