So while the combination of rising interest rates and caps on borrowing capacity have reduced homebuyer budgets, the rental vacancy rate has plummeted to record lows around the country, leaving renters with few options to choose from and landlords holding the upper hand in charging higher rents.
Rent prices will increase strongly
Australia is experiencing a rental crisis. Increased rental demand at a time of very low vacancy rates will see rentals continue to rise throughout the next few years. Then as our international borders open further this will further increase the demand for rental housing.
This very low vacancy rate has been sustained for most of 2022, a situation not seen in the last 20 years. Such pressure for rental housing pushes up rents, and as a result national combined rents (i.e. that is for houses and apartments) are the highest they have ever been: $542 per week (for November 2022).
House prices across the country are on track to fall 18 per cent and not start rising until 2024, one of the nation's biggest lenders has predicted amid warnings the rental market will become even more expensive as overseas workers return to Australia.
Higher inflation overall and for housing-related items and services. Overall inflation and sector-specific inflation may naturally contribute to expensive rent. News commentators and economists have been stressing how high year-over-year inflation rates have gotten in 2022, and with good reason.
Australian landlords passed on their biggest-ever rent increases in 2022, and the cost-of-living situation is unlikely to ease significantly for tenants in coming months.
If you can't afford your next rent payment you should talk to your landlord and let them know as soon as possible. Your landlord is the local council or housing association you pay rent to. Find their contact details on your tenancy agreement or any letters you've had from them. It's best to call up and speak to them.
The short answer is yes, absolutely you can. If you put an offer forward to a real estate agent, they are required to take it to the landlord for consideration and a decision. Here are the things you should consider before making that call.
What Happens to Rents in a Recession? Rents can go both up and down in a recession. The location of a rental property and how hard the local economy is hit by a recession will dictate whether rents go up, down or stay the same.
Why is property so expensive in Australia? A number or reasons, such as foreign investment, stronger land regulation, prohibitive tax systems, a highly urbanised market and more.
Housing cost of living comparison
The most expensive place for housing in Australia is Sydney. Including utilities, it's almost double (43%) the cost of Adelaide, which is the least priciest capital city. Monthly rent in a 2 bedroom apartment* is likely to cost you around $277 more a month in Sydney than in Melbourne.
Overall, Canberra remains the most expensive capital city to rent a house in, with median weekly rents sitting at $690. Sydney takes second place at $640 per week, followed by Darwin ($620 per week), Hobart ($540 per week), and Brisbane ($525 per week).
Realestate.com. au's analysis showed that, even if prices rose at a similar rate to inflation over the next five years, the median house price would still be near $1.5m in 2027.
The lowest rental rates are usually found between October and April, particularly right after the December holiday season. Fewer people are interested in moving—the weather's bad, schools are in session, etc. So individuals renting between the months of December and March typically find the best rental bargains.
Generally, inflation positively impacts rent for property owners because it means that they can increase rent, and therefore, the income they bring keeps pace with the rising price of goods. Inflation also benefits property owners because construction prices go up, which means fewer new rental properties are available.
Fixed-term: Rent cannot be increased unless the amount of the increase, or a method of calculating it, is set out in the agreement. Prescribed amount: Rent increases are generally limited to the 'prescribed amount' (landlords can only increase the rent by 10 per cent more than the increase in Canberra CPI).
In short, yes, and you can negotiate with the letting agent or landlord to lower the rent. This is the case whether you're looking to move into a place or already live there and want to dispute a rent increase.
Can you negotiate rent? Yes. Each landlord will differ in how receptive they are to negotiating rent, but it happens a lot. Often landlords build risk into their rental rates so they can afford it when a renter is late or breaks their lease.
Tenancy Assistance – This is a once-only payment in a 12-month period, to help clients who've fallen into arrears with their rent and/or water bill. The maximum amount of assistance is limited to the equivalent of 4 weeks' rent. It's not provided as a loan and does not have to be repaid.
How far behind on my rent can I get before eviction? The law varies depending on the type of tenancy agreement you have with your landlord. But, generally, it states that a tenant has to be 8 weeks behind on rent (if paying weekly) or two months behind (if paying monthly).
Rent a No Deposit Property
However, it's possible to find and rent a 'zero deposit' property. With these rentals, you're still liable as the tenant to pay the landlord for any financial loss at the end of the tenancy. However, you don't have to fork out a huge lump sum at the start as you do with a traditional deposit.
There must be at least 12 months between rent increases or since the start of the lease agreement. Although there's technically no limit on the amount the rent increase can be, tenants can challenge an excessive increase with the Residential Tenancy Commissioner (RTC) within 60 days of the increase.