Biggest surprises of Australia’s rental market revealed

May 14, 2024

In some parts of Australia, rents are bafflingly high, while in others, they’re surprisingly affordable.

In some cities, it’s the areas you’d least expect that are showing the highest rental growth.

‘Water, water everywhere but not a drop to drink’ were the words of the Ancient Mariner, but his frustration is likely shared with many people looking for a Gold Coast rental.

The ‘glitter strip’ may be abundant with apartment towers but with median rental prices for units at $700 per week, a staggering 62.8% leap from March 2020, according to PropTrack data, not everyone can afford one.

Gold Coast rental properties are among the most expensive in the country, surpassed only by parts of Sydney. The nation’s most expensive rentals are in Sydney’s eastern suburbs, where tenants are forking out $950 per week.

PropTrack’s director of economic research Cameron Kusher said the Gold Coast is a unique market where demand is high yet the number of long-term rentals is surprisingly low.

“There are so many units but a lot of those are let short-term or holiday apartments, which offer better returns,” he said.

Gold Coast Apartments

Gold Coast median rental prices for units have grown to $700 per week. Picture: Getty

“There’s not enough long-term rentals to cater to the level of demand. I was surprised by how expensive rents are on the Gold Coast relative to elsewhere in the country.”

Mr Kusher said many people moving to southeast Queensland were choosing to base themselves on the Gold Coast instead of Brisbane.

“It’s a big city in its own right, it’s only an hour’s drive from Brisbane, but it also has direct flights to Sydney and Melbourne. Other regional areas don’t really have those direct options.

“The Gold Coast is a little bit different to other coastal locations around the country, and that’s what’s driving people to want to be there.”

Tina Nenadic at Gold Coast Property said the rental market was getting undeniably tougher.

“It’s definitely hard, especially in that lower bracket. For anything under $1,000 a week, we can get 30-plus people through and receive 10 applications,” she said.

“It’s especially hard for single people. I’m seeing some go two together so they can split the rent.”

A shortage of properties for sale to satisfy demand was compounding the problem, she added.

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“A lot of the time, people will say, ‘Well if I can’t find something, I’ll rent’.”

Melbourne ‘relatively affordable’

Melbourne also emerges as a surprise in the data with its relative rental affordability.

The median weekly rent for dwellings in the Victorian capital was $560 in the March quarter, compared – in declining order – to $720 in Sydney, $635 in Perth, $620 in the ACT, $600 in Brisbane, $600 in Darwin, $550 in Adelaide and $520 in Hobart.

Even rents in inner Melbourne, at $640 per week, remain more affordable than those in inner Perth ($680) and inner Brisbane ($670).

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Melbourne’s median weekly rent for dwellings was $560 in the March quarter. Picture: Getty

“For people in Melbourne, their rents have gone up a lot [13.1% year-on-year], but if you’re looking around the country, it actually looks fairly reasonable,” Mr Kusher said.

He puts this down to a greater housing supply in Melbourne than in other cities, people’s capacity to pay, and fewer people migrating to Victoria from other parts of the country.

In the year to September 2023, Queensland and Western Australia were the only two states or territories to register a positive net interstate migration – that is, more people arriving than departing, according to the ABS.

Rents growing the fastest in cities’ outer areas

Contrary to expectations that inner-city areas would experience the highest rental surges, PropTrack’s insights reveal a different story.

“When you look at rental growth, days on site or enquiries per listing, this is actually happening in areas further afield,” Mr Kusher said.

In Sydney, prices for rentals in Parramatta and Blacktown grew year-on-year by 16.1% and 14.5% respectively, compared to 9.4% in the city and inner south.

In Melbourne’s outer east and north west, rents jumped by 12% and 15.6% respectively, outstripping the inner city.

“People can’t afford to live in those traditional rental-centric markets and are being pushed further away from where they would ideally like to be,” Mr Kusher said.

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Haidar Ghahwati at Ray White Blacktown described his local rental market as “crazy”. He’s seeing people share with strangers just to be able to afford the rent, which is pushing prices even higher.

“It’s very difficult for people here to get an affordable rental,” he said.

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PropTrack director of economic research Cameron Kusher said it was surprising how expensive rents were on the Gold Coast relative to elsewhere in the country.

“Nine months ago, I rented a two-bedroom apartment in one building for $570 per week. A one bedroom in the same building was recently advertised for $550 and it went for $600. It’s beyond belief.

“I’ve seen two families living under one roof so they can live close to the train station.

“If you want to live with your partner or by yourself, you have to compete with that.”

Rental growth is starting to slow

While rental prices continue to rise, that growth is also slowing, likely due to strained affordability.

Advertised rents may be up 9.1% over the past year, but this is the lowest annual increase since December 2021.

Brisbane and Adelaide have experienced the most notable slowdowns, with quarter-on-quarter changes of 0% and 0.9% respectively (compared to year-on-year changes of 9.1% and 10%).

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Adelaide’s rental price growth has slowed, rising just 0.9% in the March quarter, compared to the previous quarter. Picture: Getty

But tenants in Perth can’t look forward to the same respite, Mr Kusher said.

“I think we’ll continue to see rents rise the most in WA – in Perth and also some of the mining towns,” he said.

“There’s just no supply there, the economy is strong, the unemployment rate is low, and I think a lot of people who grew up in Perth now realise that they may not need to leave for their careers. It’s a real challenge.”

He also doesn’t expect Gold Coast rental prices to dip anytime soon.

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Perth’s median weekly advertised rent jumped 15.5% during the year to March 2024. Picture: Getty

“There’s quite a lot under construction on the Gold Coast but a lot of it is targeting the owner-occupied segment rather than the investor market. So I think rents are going to continue to rise.”

But even on the Goldy, the rate of growth has eased.

“Rents over the past year were up 5.6%. Go back 12 to 18 months, and they were up around 20% year-on-year,” he said.

“If it kept going up strongly, people just wouldn’t be able to afford to rent on the Gold Coast anymore.”



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