Rental Market in Australian Capital Cities Surges with Over 44% Experiencing Rent Increases Above 10% – Sydney Auction Clearance Rate at 75%

Week’s Key Focus

New South Wales’ Chris Minns government makes a significant decision on the contentious rent bidding issue, exacerbating the housing crisis.

According to a June 8th report by Australia’s Channel Nine, the rental market in Australia’s capital cities remains highly competitive. The latest research data reveals that over 44% of city areas have experienced double-digit rent increases.

Analysts from CoreLogic state that the rental market, characterized by high demand and low supply, coupled with an influx of overseas immigrants and students, has led to the strongest annual rent growth in history.

Over the past year, rents for approximately 1,700 independent houses and apartments in various city areas have increased by 10% or more, although the rate of increase is showing signs of slowing down.

In May, rents rose by 0.8%, a decrease compared to 0.9% in April and 1% in March. However, this deceleration is primarily driven by declines in remote areas and has little impact on potential tenants in capital cities.

In remote areas of Australia, rent growth in May was 0.3%, lower than the record monthly increase of 1.2% in March 2022.

Kaytlin Ezzy, an economist at CoreLogic, stated, “Rent growth in remote areas has significantly slowed compared to a year ago, while rents in capital cities rose by 1.0% in May.”

Tenants searching for housing are exerting immense pressure on the apartment market due to its relatively higher affordability.

In May, apartment rents in capital cities jumped by 1.4%, whereas rents for independent houses increased by 0.9%.

The gap between median rents for overall independent houses and apartments in capital cities has narrowed to $60 per week, while the national gap has shrunk to $36 per week, highlighting this trend.

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Auction Results This Week

Sydney: 354 properties participated in auctions, with 228 auction results reported, 171 properties sold, achieving a clearance rate of 75%. The total value of auctions reached 169,303,513 AUD, with a median property price of 1,400,000 AUD.
Melbourne: 253 properties participated in auctions, with 174 auction results reported, 117 properties sold, resulting in a clearance rate of 67%. The total value of auctions amounted to 102,036,500 AUD, with a median property price of 1,000,000 AUD.