Rental stock has plummeted to historic low levels, with population growth continuing to drive demand.
According to the latest PropTrack Rental Report December 2023, total rental listings on realestate.com.au fell 4.7 per cent annually, to sit 30.2 per cent below the December decade average.
Strong demand for the limited rental stock also caused prices to skyrocket, with the median rent on the platform surging 11.5 per cent over the year to $580 per week.
PropTrack Director of Economic Research and report author, Cameron Kusher, said the rental market was severely unbalanced, but things may improve slightly this year.
“The rental market was characterised by low supply and strong demand in 2023,” he said.
“These conditions made it difficult for renters to find accommodation and saw landlords increase rents, a trend likely to continue in 2024.
“While we expect rents to continue to rise this year, it’s likely that the rate of growth will slow.
“The already higher cost of renting and overall increase in the cost of living will limit rent price increases moving forward.”
The number of new rental listings on realestate.com.au in December were also 4.6 per cent lower than at the same time in 2022, and 20.7 per cent behind the 10-year average for the month.
Across the combined capital cities, new rental listings were 5 per cent lower over the year in December and they remained 3.4 per cent lower in regional markets.
Compared to the December decade average, capital city new listings were 20.4 per cent lower and regional market new listings were 21.4 per cent lower.
Weekly rents also soared, with the median weekly advertised rent across the combined capital cities rising 0.8 per cent to $600 in the December quarter.
They were 13.2 per cent higher over the year.
Combined regional market rents were unchanged over the past seven months but increased 4.2 per cent over the past year to $500 per week.
“For renters hoping to purchase a property, higher rents are making it difficult to save a deposit, while higher interest rates will make servicing a mortgage more expensive,” Mr Kusher said.
With such limited supply, the number of enquiries per listing also increased 3.3 per cent over the year to 23.8.
The national rental vacancy rate remained near record lows at 1.1 per cent and was lower than the 1.3 per cent recorded in December 2022.
“Nationally, investors are still exiting the market,” Mr Kusher said.
“There has been a rebound in new investor lending this year but it is not enough to sufficiently improve stock levels.
“With total rental listing volumes at historic lows and well below their decade average, rental conditions are likely to remain challenged.
“There is a critical need for additional housing, particularly in the major capital cities.
“Serious consideration needs to be given to the financing of these projects and the capacity to build the volume of housing we need.”