Analysts say open borders and increased migration have driven demand for real estate – and increases in rental prices. What matters for rents, as for any price, is the demand for and the supply of the product being priced. More demand (more renters wanting properties) and the price climbs.
More recently, the return of international migration – and, in particular, the return of international students – has added to demand for rental properties in the major cities. Advertised rents have grown strongly and finding a suitable rental property has become more difficult as vacancy rates have declined.
While there's no consensus on what rents will do exactly in 2023 — go up a little, go down a little, or stay flat, according to three forecasts — what's clear is they are expected to return to more normal growth patterns, instead of the unsustainable, record rates seen in 2021 and 2022.
One problem contributing to the crisis is soaring rental prices. Thanks to rising interest rates and the cost of living, landlords have had to increase rents to keep on top of mortgage repayments, which doesn't help those trying to find an affordable place to rent.
Australian rental affordability has dropped to its worst levels in nearly a decade, with the average household spending a third of its income on rent, as the impacts of the Covid pandemic continue to be felt on the market.
High house prices in Australia are primarily driven by supply and demand imbalances, tax policies, low-interest rates, and rising household debt.
It means Australia will fall short of its housing needs between 2023 and 2027 by 106,300 dwellings, a report released on Monday by the government-run National Housing Finance and Investment Corporation said.
Between the 2016 census and this census in 2021, the share of Australians owning their homes remained steady at about 66%. The proportion renting also changed little, climbing from 30% to 30.6%.
It's cheaper to rent than buy a house in 90% of Australian suburbs.
This line graph shows that the proportion of owners with a mortgage increased from about 30% in 1994–95 to 37% in 2019–20. This line graph shows that the proportion of renters renting from private landlords increased from about 18% in 1994–95 to 26% in 2019–20.
Nationwide prices are expected to rise by approximately 2 per cent by the end of 2023. However, as the RBA potentially cuts interest rates before the end of 2023, demand pressures will contribute to a favourable environment for property prices.
But the calendar months do not have equal numbers of days - they range from 28 to 31 days. Expressing a rent as a monthly figure instantly creates the potential for confusion about which month is being referred to. Ergo, the rent is expressed as a weekly figure for easy comparison.
Landlords cannot raise rent annually more than 5% plus inflation according to the regional Consumer Price Index, for a maximum increase of 10% each year.
Rents had climbed rapidly as a result, particularly in inner Melbourne and Sydney where they skyrocketed 40 per cent and 29.3 per cent respectively over the year, rebounding from sharp declines earlier in the pandemic.
Generally speaking, landlords cannot increase the rent more than once every six months or once a year. In New South Wales, the ACT and Victoria, for example, it's the latter, while Western Australia and the Northern Territory allow for price hikes every six months.
Sales Price: If the properties in your area are going through a slump period or you expect the property prices to rise in the near future, it is better to rent out than sell. Capital Gains Tax: If you do not plan the sale carefully, you could end up paying thousands as capital gains tax on your investment property.
Renting offers flexibility, predictable monthly expenses, and someone to handle repairs. Homeownership brings intangible benefits, such as a sense of stability and pride of ownership, along with the tangible ones of tax deductions and equity.
Buying a house can be considerably cheaper than renting in the long term. This is because you will never recover your monthly rent payments. This is a financial setback, as it will be difficult to build enough equity. On the other hand, a home is a stable asset that will increase your equity.
Canberra still Australia's most expensive city to rent a house.
Assuming that the average mortgage age in Australia starts somewhere between 25 and 34 years, then to work out the average age to pay off a mortgage in Australia, you just need to add a 25 to a 30-year term. This would make the average age to pay off a mortgage in Australia between 50 and 64 years.
Overall, Canberra remains the most expensive capital city to rent a house in, with median weekly rents sitting at $690.
Rent inflation for apartments with new tenants was 24 per cent over the year to February 2023, whereas the overall index increased by 14 per cent. By contrast, rent inflation for houses and townhouses with new tenants was around 10 per cent over the year to February 2023.
This measure shows the proportion of low-income renter households paying more than 30% of their income on rent – that is, those in rental stress.
Australian property values experienced a downturn in 2022 and prices continue to fall—but predictions of the overall peak-to-trough price decline tend to vary between 15-25%. Read more about whether the Australian property market is going to crash.