Stretched renters could soon get relief as the pace of rental growth starts to slow.
Renters endured the fastest growth on Corelogic’s records last year, with rock-bottom vacancy rates driving national rents up by 10.2 per cent.
But December quarter rental data shows the pace of growth slowing to two per cent in the final three months of 2022.
This follows 2.3 per cent growth in the September quarter and the peak three per cent rate of growth in the three months to May.
PropTrack data, released on the same day, also showed rental price growth steadying in the December quarter.
And while the pace of growth is starting to ebb in line with a slight seasonal easing in vacancy rates and tenants hitting the limit of what they can afford, Corelogic’s head of research Eliza Owen said tenants had a while to wait before prices actually started falling.
“Rents are still rising in most capital cities and regional areas with vacancy rates low,” Ms Owen said.
Head of Homelessness Australia, Kate Colvin, said vulnerable renters were falling deeper into housing stress.
“These figures are alarming and further proof that more Australians are doing it tough, plunging deeper, or for the first time, into housing stress and poverty,” she said.
“The dreadful stories we keep hearing of people sleeping in cars and skipping meals will sadly continue.”
Ms Colvin called on the government to ease pressure on renters in the May budget, including upping Commonwealth Rent Assistance payments and putting more money into social housing.
Looking forward, Corelogic said the outlook for the rental market was mixed.
Ms Owen said the return of normal migration patterns, which the government forecasted in its population statement last week, will keep upward pressure on rents, especially in popular parts of Sydney and Melbourne.
Plus, the Reserve Bank’s interest rate hiking cycle will slow property investment by limiting the amount that can be borrowed, weighing on supply.
But a seasonal uplift in new listings is expected in early 2023, which will improve choice and ease some of the pressure on rents.
Region by region, Canberra had the sharpest decline in rents, with dwelling rents easing by 0.7 per cent following a peak-to-trough upswing of 18.1 per cent from September 2020.
The nation’s capital still holds the title as the most expensive place to rent but by just $2, with Sydney’s median rent of $679 per week narrowing the gap.
“Unlike Canberra, high levels of net overseas migration to NSW and Victoria has vastly offset negative net internal migration flows in the year to June 2022,” Ms Owen said.
She said the two biggest cities remained the top destinations for migrants.
“This has likely contributed to unprecedented annual growth in unit rents over 2022, which was 15.5 per cent across Sydney and 14.2 per cent in Melbourne.”
(Australian Associated Press)