Home Insights Rental conditions worsen in our largest capital cities but there is some relief for the regions

Rental conditions worsen in our largest capital cities but there is some relief for the regions

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Rent prices continue to rise as competition for rental properties intensifies due to strong demand and tight supply. However, small and medium-sized capital and rural renters may finally be seeing some improvement.

According to PropTrack’s recent Market Insight, new rental listings fell 18.9% from March to April across Australia. This is the biggest monthly decline since 2017.

Compared to the beginning of the pandemic, there are 36.4% fewer listings for rent, and the total number of rentals on the market is down by almost 40%. This reflects how difficult the market has become.

Rental Property Information, April 2023

new rental property Active Rental Properties
Metropolitan Statistical Area (GCCSA) Change from previous month Year-on-year rate of change Changed from March 20 Change from previous month Year-on-year rate of change Changed from March 20
sydney -17.0% -5.1% -38.8% -7.8% -15.7% -42.7%
melbourne -20.8% -17.9% -34.8% -11.7% -31.3% -35.6%
brisbane -18.0% 7.9% -37.5% -10.3% 5.4% -42.0%
Adelaide -19.8% 4.0% -36.2% -11.7% 3.6% -39.8%
Perth -22.2% -16.4% -43.9% -10.4% -19.2% -52.8%
Hobart -21.3% 37.7% -18.8% -3.9% 66.1% 1.7%
Darwin -25.8% -10.0% -47.6% -22.9% 4.4% -56.7%
activity -18.0% 20.0% 36.9% -8.4% 36.5% 47.8%
capital -19.1% -7.4% -36.8% -9.8% -16.5% -40.2%
Rest of New South Wales -17.2% 23.0% -23.6% -8.5% 31.6% -26.0%
The rest of the Vic. -18.8% 8.7% -26.9% -8.1% 17.2% -21.8%
Rest of Queensland -19.4% 14.5% -44.7% -10.6% 16.5% -44.3%
Rest of SA -18.5% 19.0% -52.6% -10.7% 11.4% -60.0%
Rest of Western Australia -19.4% -4.1% -55.8% -12.6% -3.2% -62.5%
The rest of the tas. -19.2% 14.8% -22.4% -2.5% 15.3% -15.8%
rest of the Northern Territory -26.4% 16.4% -33.9% 14.6% 22.0% -40.6%
local area -18.5% 15.8% -35.6% -9.3% 20.8% -36.1%
Nationwide -18.9% -2.0% -36.4% -9.7% -8.5% -39.1%

However, trends over the past year have diverged, with the largest capital cities facing a worsening situation, while renters in smaller capitals and rural areas have more options than in the previous year.

Sydney, Melbourne and Perth in particular have seen a decline in rentals, with both new listings and total listings down from March 2023, March 2022 and March 2020.

From a year-on-year perspective, these were the only three metropolitan areas that did not see an increase in gross rentals.

This contrasts with the rental markets of Brisbane, Adelaide and Hobart, where the number of new rentals increased by 7.9%, 4% and 37.7% respectively over the past year, while the total number of rentals increased by 5.4%, 3.6% and 66.1% respectively. target.

Regional regions led the recovery trend, with new listings increasing by 16-23% in Regional NSW, Regional SA and Northern Territory. All regions except Rural WA have more options compared to March 2022.

We have seen some improvement in these areas, but it is important to note that in all areas except ACT the situation is much tougher than before the pandemic.

A competitive market may have discouraged tenants from relocating, which is reflected in the decline in new listings compared to March 2020.

Total listings have also dropped significantly since the pandemic, partly because investors are leaving the market, the supply of new homes is in short supply, and the speed of rentals once the rental properties are empty. It remains.

Rural New South Wales bucked this trend with a 23.6% year-on-year increase in new listings.Photo: Getty

This divergence between large cities and rural areas can also be seen on the demand side.

Comparing changes in the number of potential renters by property in the capital and rural areas, cities saw a 12% year-on-year increase, while rural areas saw a 21% decrease.

Strong demand in the capital may indicate a shift in preferences for where people want to live. At the peak of the pandemic, when remote work was the norm, many people moved to larger provinces and smaller cities where prices were cheaper.

But urban-to-rural migration could wane as a result of a return to the office, hybrid work, in-person college classes and the resurgence of the CBD.

More Insights from PropTrack’s Team of Experts

A resurgence of immigration, especially international students, is another factor that is likely contributing to increased rental demand in the capital. The majority of students live near the university, which is mainly located in the city center.

The rental market is expected to remain tight in the short to medium term, and demand is expected to remain high, especially in the Tokyo metropolitan area.

Rural and small-town rental property conditions have improved slightly, but the number of properties is still below pre-pandemic levels. Without a significant increase in rental supply, renters will continue to face higher rents and stiffer competition.

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