Key takeaways
Domain’s June Quarter Rent Report indicates that renters are fnally seeing some relief, with most major cities experiencing rent prices either declining, increasing at a slower pace, or stopping rising altogether.
For house rents, it marks the weakest June quarter since 2021 in Sydney and Melbourne, and since 2020 in Brisbane, Adelaide and Perth.
For unit rents, it was the weakest June quarter since 2021 in Sydney, Melbourne and Brisbane, since 2020 in Canberra, and since 2018 in Perth.
Most capital cities are also seeing higher vacancy rates annually, suggesting rental conditions are shifting to alleviate rental pressures and slow the growth of rental prices.
Domain’s latest Rent Report for the June Quarter of 2024 reveals positive news for tenants, with several market indicators shifting in their favour.
The report also predicts that this trend will continue over the next year, providing further relief for tenants.
The biggest trend is that most major cities are seeing rent prices either declining, increasing at a slower pace, or stopped rising altogether.
For house rents, the pace of quarterly rental growth was 1.5 times slower than the previous quarter across the combined capitals, halved in Melbourne and Brisbane and seven times slower in Adelaide, while growth stalled in Sydney and Perth, and declined in Hobart.
For unit rents , the pace of quarterly growth was halved across the combined capitals, three times slower in Brisbane, stalled in Melbourne, Perth and Hobart, and down in Canberra and Darwin.
It was the weakest June quarter for unit rents since 2021 in Sydney, Melbourne and Brisbane, since 2020 in Canberra, and since 2018 in Perth.
Furthermore, supporting the slowdown in rent price growth has been an improved vacancy rate (Table 3), Sydney, Melbourne, Brisbane and Canberra are at a six-month high, while Perth is now at a two-year high in June, Adelaide is at the highest point in two years and eight months, and Hobart is at a nine-month high.
Domain’s Chief of Research and Economics, Dr Nicola Powell said
“We recognise the challenges renters have been facing, so it’s encouraging to observe our latest data showing easing rental conditions.
Looking ahead, Australia’s rental market will continue to be more balanced, driven by several factors. Firstly, rental growth is slowing in line with a gradual increase in rental availability which will lead to a rebalancing of supply and demand pressures.
Secondly, rental demand is easing, as the number of prospective tenants per rental listing has consistently fallen throughout 2024.
This aligns with overseas migration passing a peak and it’s expected to decline further in the year ahead. This trend will continue to ease demand, supported by the federal government-introduced migration strategy aimed at slowing population growth.
Investors have also made a slow comeback, accounting for nearly 36% of new home loans — the highest proportion since 2018.
Thirdly, increased frst-home ownership is imminent, supported by initiatives like Queensland’s doubled frst-home buyer grant, the federal Help to Buy shared equity scheme, and revised stamp duty concessions in ACT, South Australia, Western Australia, and Queensland.
These measures aim to facilitate home ownership transitions and improve affordability, further alleviating rental conditions in Australia. All these will provide tenants with further much-needed relief in FY25.”
