Australian Rent Skyrockets, Pushing Tenants to City Fringes

Australian Rent Skyrockets, Pushing Tenants to City Fringes

Record Rents Force Move to Outskirts

Australia is facing a new high in rental prices, pushing renters further away from city centers where housing availability remains a constant struggle. According to property data provider CoreLogic, the national median rent reached a record $627 per week in April, marking an increase of 0.8%.

Inner-City Squeeze Fuels Growth in Outer Suburbs

The report highlights a significant rise in rents within 30 to 40 kilometers of major city centers. Sydney exemplifies this trend, with its median weekly rent climbing to $770, a 9% increase over the past year. Suburbs on the city's outskirts, like Campbelltown, witnessed an even sharper rise, with annual growth jumping from 9.1% to 13.4%. Similar trends were observed in Queensland's  Jimboomba  and Melbourne's Casey

Limited Supply Exacerbates the Issue

CoreLogic suggests that rising rents could be partly attributed to tenants being priced out of desirable central locations, forcing them to seek more affordable options in the suburbs. These areas may offer more space for shared living or less competitive rental markets, making them attractive alternatives

Immigration and Construction Lag Hinder Improvement

The report points to net overseas migration as a contributing factor. With temporary visa holders exceeding 90% of the nearly 550,000 arrivals in the year to September, housing demand has further intensified. Additionally, the residential construction industry continues to grapple with supply constraints, with only 173,000 new dwellings completed during the same period

Hope on the Horizon

The report suggests that a potential easing of rental pressure may come in the form of a moderation in net overseas migration. As some temporary residents depart and arrival numbers normalize post-pandemic, demand could stabilize. However, this is not expected to occur until the next financial year

Seeking Alternatives in the Short Term

In the meantime, renters may need to consider shared accommodation or explore more affordable options in the outer suburbs or regional areas. While regional rent growth has also picked up, particularly in Queensland and Tasmania, some areas like Western Australia's Pilbara have experienced significant drops from previous peaks

The report concludes by emphasizing the limited options available to address supply issues in the short term. Relief for the rental market appears to hinge on a potential decrease in net overseas migration, offering a glimmer of hope