The reopening of the Australian border is good news for cities, and the demand for CBD’s livelihood is rapidly returning.
Since the country was announced to welcome immigrants and students from abroad, the number of people trying to rent a house in the heart of a major city has skyrocketed.
The total number of rental properties searched in the capital CBD during the first 10 weeks of this year was 27% higher than during the same period in 2021.
This growth isn’t as pronounced as in Melbourne, where CBD rent searches rose 46%.
In addition, the relative interest generated by CBD rental properties is increasing.
Over the last six months, the average number of views per list has skyrocketed in all capitals except Darwin.
During this time, Adelaide CBD had the largest increase in average views per rental property (88% increase), followed by Docklands (61%) and Melbourne CBD (47%).
Searching from overseas has greatly contributed to this growth.
Permanent and long-term immigration from abroad to Australia has increased significantly since the end of last year.
Compared to domestic renters, foreign migrants and students are more likely to live in the suburbs of the city center, and their return supports the demand for these properties.
In the 12 months prior to the COVID-19 pandemic, 10% of all CBD rent searches on realestate.com.au were from abroad.
Not surprisingly, this figure collapsed after the border was closed in early 2020. In recent months, the share of overseas search has begun to recover, exceeding 10% in both January and February.
The UK has the largest share of overseas searches for rentals at realestate.com.au, followed by the United States and New Zealand. Indonesia, Japan and India are closing the top six.
Australia’s CBD is rejuvenating with rising rental demand after a few very difficult years.Photo: Getty
Changes in search volume are ahead of market activity, and recent growth is a decisive indicator of increased demand for CBD rentals.
This increase in demand is especially important for the central Melbourne and Sydney unit markets, which are most affected by the pandemic.
Over the last two years, the median cost of renting a Melbourne CBD unit has fallen by a whopping 29%, while the Sydney CBD rent has fallen by 13%.
These markets now seem to be at the bottom of the cycle, and the reopening of borders should support further growth.