Article by: Chantelle Francis, Journalist
December 06, 2021
Experts are expecting rental prices to increase dramatically as Australia’s international borders reopen.
Renters have been warned to start preparing for higher housing costs, with 22 of 30 economists and property experts from the latest Finder RBA Cash Rate Survey saying they expect rental prices to increase significantly in 2022.
“The pandemic turned the rental market on its head in some areas, with vacancy rates increasing in major capital cities like Sydney and Melbourne,” Finder head of consumer research Graham Cooke said.
He told news.com.au there was a lack of demand for rentals as Aussie students moved home or international students moved back overseas during lockdown last year, but the market was now recovering.
“There are huge increases in investor loans and a lot of that I’d say is driven by people thinking the rental market is looking more secure than it did last year,” Mr Cooke said. “All the indications are that this trend will continue.”
As international students and backpackers return to our shores, the demand for rentals is expected to quickly flow back.
“That influx of new renters to inner city areas and university areas is going to increase demand even more,” he said.
Demand for rentals is expected to increase as Australia reopens its international borders.
A quarterly report, released in October by property analysis firm CoreLogic, showed nationally rental prices were the highest they’ve been in 13 years.
National rental rates were 8.9 per cent higher year-on-year compared to the same time last year, which was the highest annual growth in dwelling rents since July 2008.
The report showed Canberra’s rental rates were the most expensive in the country, with median rent at $633 per week. Adelaide’s was the cheapest at $440 a week.
Sydney came in at $595, Melbourne at $450, Brisbane at $491, Perth at $478, Hobart at $507, and Darwin at $561.
As international borders open, Melbourne could record a faster rate of rental growth.
Regional Australia’s annual rate of rental growth of 12.5 per cent in September was the highest annual figure on record, with CoreLogic rental index figures dating back to 2005.
“Relative to household incomes, based on data to March, Melbourne was actually the most affordable capital city to rent, with households, on average, dedicating 26 per cent of their gross annual household income to rent a dwelling compared with the national average of 28.7 per cent,” CoreLogic research director Tim Lawless said in October.
“With Melbourne showing the largest exposure to overseas migration, at least historically, once international borders open we could see a more substantial boost to rental demand than in other cities.
“If this is the case, we could see Melbourne once again recording a faster rate of rental growth.”