Australia sees largest rent declines since COVID

Sydney recorded a 1 per cent decrease in combined house and unit rents, while Melbourne recorded a more modest drop of 0.6 per cent.

Even the white-hot markets of Perth and Brisbane have been cooling, with rents dropping 0.6 per cent and 0.5 per cent respectively.

Only Adelaide and Darwin saw an increase in rents over the past month, with coastal regions like the Gold Coast and Mornington Peninsula also witnessing declines.

While the news will be welcomed by renters across the country, SQM Research managing director Louis Christopher warned that rents are still far from cheap.

“For the past 30 days, SQM Research has recorded the largest decline in capital city rents since the days of 2020 when COVID first hit the country.”

“It should be noted of course that rents are still very high and this retracement is minor compared to the massive rise in rents recorded around the country since 2021,” Christopher said.

Meanwhile, rental vacancy rates remain stubbornly frozen well below the 3 per cent mark generally considered “healthy”.

The national vacancy rate currently rests at 1.3 per cent, with Canberra recording the highest vacancy rate (2.2 per cent) and Perth and Adelaide continuing to see extremely tight vacancy rates of under 1 per cent.

In the pricey cities of Sydney and Melbourne, rental vacancy rates sit at 1.7 per cent and 1.5 per cent respectively – broadly consistent with last year’s vacancy rates.

“The rental crisis is still not yet over as we have recorded an ongoing low national vacancy rate,” observed Christopher.

Looking forward, the managing director forecast that rents will continue to moderate in the coming months, but are unlikely to fall sharply any time soon.

“As a research house, we do believe the market rental rises of 10–20 per cent per annum are now over,” he remarked.