Rents grow at slowest rate in more than three years

TWO new reports show that rent growth is slowing but is still much higher than pre-pandemic levels.

SQM Research’s Weekly Rents Index shows a mixed bag in capital cities over the past month, leading up to November 12.

And the new NAB/CoreLogic figures show annual rental growth slowing to give renters some relief.

In Sydney, rents decreased by 0.1% to $836.98, indicating the market remains relatively stable, according to SQM Research managing director Louis Christopher who expects demand to soften even more over the coming weeks.

Melbourne rents fell by 0.2% to $627.09, hinting at a softening in rental demand and Brisbane saw a sharp decline of 1.1% to $657.29. Perth – traditionally one of the more resilient markets – saw a 0.8% decline to $715.26.

Adelaide, Canberra, Darwin and Hobart were all heading in the opposite direction.

Adeliade rents increased by 0.8% to $609.18.

Canberra stood out with an increase of 2.3% bringing rents to $655.82.

Darwin also witnessed significant and continued growth throughout the month, with rents rising by 4.2% to $602.75.

Hobart’s also followed and experienced a small rise of 0.4% to $505.32. Nationally, the combined rent average across all cities rose by 0.3%.

Mr Christopher said: “National rental vacancy rates fell slightly in October by less than what was expected by SQM Research.

“The market has now reached its seasonal bottom on about 6,500 more rental vacancies than recorded this time, last year.

“Looking forward to November and the end of the year, our expectation is that national rental vacancies will rise from these levels as university students complete their semesters.

“There is also overall reduced tenancy demand in the seasonal lead up to Christmas.

“Advertised rents should ease over this time with the 12-month rental increase for 2024 likely to be in the range of 3% to 4% which will be the slowest rate of rental growth recorded since 2020.”

The new NAB/CoreLogic figures show annual rental growth slowed to 5.8 per cent in October.

“We’re seeing some signs of relief for renters who have gone through a significant rise in rents over the past five years,” said CoreLogic research director Tim Lawless said.

“Pre-pandemic, the 10-year average for rental growth was 2 per cent.

“We’ve pretty much seen those peak growth rates halve, but they are still more than what you’d consider average.”