Key takeaways
Despite tightening vacancy rates, rental prices are easing, offering a slight reprieve for tenants. Vacancy rates tightened in capital cities but rents eased over August, providing some notional relief for tenants.
Most capitals reported lower house rents over August, with Sydney, Melbourne, Perth, Hobart and Canberra all lower over the month, and Sydney still reporting the highest weekly asking house rents at $800 per week.
Median weekly asking rents have continued to ease, with most capitals again reporting lower rents over the month. Sydney remains the clear leader for weekly unit rents at $750, with Hobart still the most affordable now at $440 per week.
Home rental markets produced mixed results over the final month of winter with recently higher vacancy rates tightening although rental growth declined overall.
House building costs are still rising at 3% per annum, which is significantly less than the post-Covid rise in construction costs.
A surge in early spring auction numbers provided a test of buyer depth over the weekend, with clearance rates generally lower. Auction numbers are expected to rise sharply again next weekend over the pre-Grand Finals Auction Super Saturday.
As we transition out of winter, the rental markets around Australia are showing some intriguing trends.
Despite tightening vacancy rates across our capital cities, we're seeing a general easing in rental prices, offering a slight reprieve for tenants.
To understand what’s really going on, in my weekly Property Insiders chat with Dr Andrew Wilson, Chief Economist for My Housing Market, we unpack his latest rental report.
Vacancy rates tighter but rents ease over August
Watch this week’s Property Insider video as Dr Andrew Wilson explains how capital city rental markets produced missed results over the final month of winter with vacancy rates tightening following the easing of recent months.
Rents, however, were generally lower, providing some notional relief for tenants.
Most capitals reported lower house rents over August except Brisbane and Adelaide, where rents were higher by 0.4%, and volatile Darwin with a sharp increase of 2.9%.
Sydney, Melbourne, Perth, Hobart and Canberra were all lower over the month, falling by 2.4%, 1.6%, 1.5%, 0.9% and 0.4% respectively.
Sydney continues to report the highest weekly asking house rents at $800 per week, with Hobart still the most affordable, steady at $550 per week.
Most capitals, however, continue to report sharp annual increases in house rents, with Perth still the highest, up by 10.8%, Brisbane up 9.9%, Adelaide now higher by 8.5%, Sydney up 6.7%, and Melbourne rising 5.2%. Darwin annual house rents have increased by 3.2%, Canberra up 1.9%, and Hobart steady over the year.
Most capital city house vacancy rates remain just above 1.0% and are still in favour of landlords.
Median Weekly Asking Rents August 2024
| Rent | Month | Year | Vacancy Rate | Change | |
|---|---|---|---|---|---|
| Sydney | $800 | -2.4% | 6.7% | 1.3% | ↓ |
| Melbourne | $610 | -1.6% | 5.2% | 1.2% | ↔ |
| Brisbane | $640 | 0.4% | 9.9% | 1.2% | ↔ |
| Adelaide | $620 | 0.4% | 8.5% | 1.0% | ↓ |
| Perth | $665 | -1.5% | 10.8% | 1.1% | ↓ |
| Hobart | $550 | -0.9% | 0.0% | 1.3% | ↓ |
| Darwin | $720 | 2.9% | 3.2% | 0.7% | ↓ |
| Canberra | $678 | -0.4% | 1.9% | 1.9% | ↓ |
Unit rents have continued to ease, with most capitals again reporting lower rents over the month.
Rents in Darwin, Brisbane, Adelaide, Perth and Hobart declined, falling by 0.2%, 0.4%, 0.5%, 2.4% and 4.3% respectively. Canberra and Melbourne rents were steady over August, with Sydney's rents being higher by 0.7%.
Perth, Adelaide and Darwin annual unit rental growth remain sharply higher – up by 10.0%, 9.0%, and 7.0%, respectively.
Melbourne unit rents have increased by 5.6% over the year to August, with Brisbane up 5.1%, Sydney 4.2% higher and Canberra remaining steady.
Hobart annual unit rents, however, have fallen 2.2%.
Sydney remains the clear leader for weekly unit rents at $750, with Hobart still the most affordable now at $440 per week.
Similar to houses, capital city unit vacancy rates were mostly lower or steady over August compared to July with Canberra, Hobart and Melbourne continuing to track above 2.0%.
Median Weekly Asking Rents August 2024
| Rent | Month | Year | Vacancy Rate | Change | |
|---|---|---|---|---|---|
| Sydney | $750 | 0.7% | 4.2% | 1.8% | ↑ |
| Melbourne | $585 | 0.0% | 5.6% | 2.5% | ↔ |
| Brisbane | $620 | -0.4% | 5.1% | 1.6% | ↑ |
| Adelaide | $500 | -0.5% | 9.0% | 0.8% | ↓ |
| Perth | $605 | -2.4% | 10.0% | 0.9% | ↓ |
| Hobart | $440 | -4.3% | -2.2% | 2.4% | ↓ |
| Darwin | $589 | -0.2% | 7.0% | 1.0% | ↓ |
| Canberra | $550 | 0.0% | 0.0% | 3.5% | ↔ |
Home rental markets produced mixed results over the final month of winter with recently higher vacancy rates tightening although rental growth declined overall.
Markets continue to show positive signs of a better balance between supply and demand overall despite high migration and low home building - although continue to remain challenging for tenants and positive for landlords in most capitals.
House building costs still rising
Watch this week’s Property Insider chat as Dr. Andrew Wilson discusses the latest building cost figures which show that the cost of construction of new homes has a reason at the equivalent of 3% per annum.
As you can see from the following charts, this is significantly less than the post-Covid rise in construction costs which followed the various government building stimulus packages.
Auction listings surge tests early Spring Weekend markets
A surge in early spring auction numbers has provided a test of buyer depth this weekend, with clearance rates generally lower.
The national weekend auction market reported a clearance rate of 60.6%, which was just above the 58.8% reported over the previous weekend – but well below the 70.5% recorded over the same weekend last year.
National auction numbers were significantly higher at the weekend with 2330 listings versus the previous weekend's 2025 and remained well above the 1926 listed over the same weekend last year.
Auction numbers can be expected to rise sharply again next weekend over the pre-Grand Finals Auction Super Saturday and provide another stern test of early spring market buyer depth.
