Rental growth at its slowest since 2021
The national median rent rose by 6.9 per cent over 2024, marking the slowest growth since late 2021.
The REA Group Rental Report for the December 2024 quarter showed that the median rent in Australia increased by nearly 7 per cent over 2024, reaching $620 per week.
Despite data showing a slower rental increase over the last 12 months, the median rental price of Australian homes still outperformed inflation or wage growth.
REA Group executive manager, economics, Angus Moore, said the metrics show the market is gradually easing for renters.
“We did see the pace of rental price growth slow to less than half of that of 2023, marking the slowest annual increase since late 2021,” Moore said.
In 2023, the national rental market recorded a 20 per cent annual increase, while the median weekly rental rates increased by 4.7 per cent in 2021.
Moore said capital city markets drove the slow rental growth.
The report showed that median rent across the combined capital cities increased by 1.6 per cent in the December quarter, reaching $640 weekly.
Australia’s two biggest rental markets, Sydney and Melbourne, have seen their rent remain flat for the past six months, reaching a median rent of $730 and $570, respectively, in December.
Despite no growth for half of 2024, Sydney’s rental market remains the most expensive nationwide.
In comparison, Perth and Adelaide recorded the highest weekly rental increase in 2024 at 8.3 per cent and 7.4 per cent, respectively.
Perth’s median weekly rent now reaches $650, outperforming Brisbane’s median of $630, while Adelaide’s weekly rent stepped up to $580, surpassing Melbourne’s.
“Slowing national rental price growth was largely driven by tempering capital city markets over the past year; meanwhile, regional rent growth outpaced capital cities and availability tightened further,” Moore said.
Regional renters saw their rent grow by 10 per cent over the last 12 months to $550 weekly.
Moore said another reason for the flattening was the number of properties available to rent, giving renters greater choice.
In December, the total number of rentals advertised nationwide increased by 9.5 per cent year on year, and new rentals were 4.6 per cent higher than the two previous quarters, the busiest month since 2020.
The total number of properties advertised for rent in capital cities was up by 14.6 per cent in December compared to a year prior, while regional areas were down by 4.1 per cent over the same period.
Despite median rent prices growing slower in 2024, investors saw their gross rental yield remain steady at 4.4 per cent in December, the same rate as in December 2023.
Moore said while the rental market eased in 2024, rents will continue to rise in 2025.
“Despite some easing of rental pressures, the market remains far tighter than pre-pandemic levels, and availability is still strained.”
“Rents are expected to keep rising in 2025, though at a more moderate pace,” Moore said.