At first glance, the rental market might appear to be booming, with many areas having experienced strong rental growth over the past year. However, the latest data suggests this trend may be slowing down.
In August, the national median rent remained unchanged for the second consecutive month, according to CoreLogic. While rents didn’t decrease, they also did not increase.
CoreLogic noted that while monthly rental data can be impacted by seasonal factors, the annual growth trend also indicates a consistent cooling in the pace of rent increases. Over the 12 months to August, national rent values rose by 7.2%—the lowest annual growth rate since May 2021. This slowdown is occurring in every capital city market except Hobart, which is recovering from a dip in rents seen throughout 2023.
The rental slowdown is attributed to two main factors:
- Decreased demand: Net overseas migration has reduced, leading to fewer people seeking rental properties.
- Increased supply: Larger average household sizes mean that fewer homes are needed, which has freed up more rental properties.
Although rents are still higher year-on-year, this slowdown could provide some relief to tenants after a period of rapid rent increases.
