Australians now face all-time high rents, expert anticipates turning point ahead | Latest Domain Rent Report

Key takeaways

House rents have reached a record high across the combined capitals ($630 weekly), marking the steepest quarterly gain in 17 years and the second-highest on record. Meanwhile, unit rents across the combined capitals ($620 weekly) continue their record-breaking streak of 11 successive quarters of growth.

However, a tipping point will still likely be reached in 2024 with the competitive rental change-over period being over and other positive shifts in market dynamics, such as a slowdown in population growth.

Australia’s rental market experienced a reacceleration of rental growth over the first quarter of 2024, leading to record-high asking rents, Domain’s latest Rent Report March Quarter 2024 reveals.

According to Domain, while Australia’s perilous rental market appears entrenched in a never-ending run of rent rises, a tipping point is still likely to be reached in 2024.

The report shows that house rents  are at a record high across the combined capitals and all cities apart from Canberra.

The current weekly house rents and changes

House rents across the combined capitals have surged by 5% in the March quarter, marking the steepest quarterly gain in 17 years and the second-highest on record.

Every capital city except Darwin and Hobart has witnessed a quarterly rise in house rents.

In tandem with the surge in house rents, unit rents  are also at an all-time high across the combined capitals and all capital cities apart from Hobart, with the combined capitals seeing an unprecedented stretch of 11 successive quarters of growth.

The current weekly unit rents and changes

Quarterly gains in unit rents also surpassed houses across all capital cities apart from Adelaide.

Furthermore, vacancy rates (table 3) have decreased in the last quarter across all capital cities except Hobart.

Sydney, Melbourne, and Perth are at record lows while Adelaide and Brisbane are nearing record lows.

The current vacancy rates and changes

 So is it all doom and gloom?

Well, according to Domain’s Chief of Research and Economics, Dr Nicola Powell, the first quarter of the year usually marks the rental change-over period, and we anticipated it would be one of the most challenging seasons yet due to the already low rental stocks.

"The current rental conditions show this intensified seasonal trend — a surge in tenant demand against a limited supply. This imbalance has consequently fuelled a renewed acceleration in rental price growth", she said.

She commented further:

"While Australia’s perilous rental market appears entrenched in a never-ending run of rent rises, we remain optimistic that a tipping point will be reached in 2024.

Some sub-markets will operate with more balance and rent growth will slow — some areas already show these signs.

Currently, we are seeing the number of prospective tenants per rental listing ease, suggesting some pressure has been lifted.

This could be an early indicator of an increase in vacancy rates sometime this year.”

Dr Powell also highlighted that international student visa applications have turned a corner and started to fall for the first time in more than two years.

She noted that:

'Population growth is likely to have peaked, and the federal government has introduced a migration strategy that will slow population growth.

Homeownership is also at the forefront with incentives in place (such as Queensland doubling the first-home buyer grant and the federal government's “Help to Buy” shared equity scheme), which will help transition some to being owners or fast-track others to a more affordable purchase.”

About Leanne Jopson Leanne is National Director of Property Management at Metropole and a Property Professional in every sense of the word. With 20 years' experience in real estate, Leanne brings a wealth of knowledge and experience to maximise returns and minimise stress for their clients.