The rent crisis has hit a whole new level, with new research showing the difference between the median cost of renting an apartment compared to a house is now just $34 a week.
National unit rent prices reached a new peak – jumping 4.4 per cent in the three months to May – while house prices jumped just 2 per cent in the same period, according to CoreLogic’s quarterly rental review.
While units remain the more affordable option, the increase in demand for apartments saw the gap between median house and unit rents shrink from $62 in December 2021 to $34 in June.
Signs rent crisis may be easing
It’s not all doom and gloom though. Tenants might be relieved to hear Australia’s monthly rate of rental growth eased in June, according to the report.
However, ongoing demand pressures and “chronic undersupply” has kept rental growth, particularly for units, well above long-term averages.
CoreLogic economist Kaytlin Ezzy said, while a slowdown in rent price growth was evident across the monthly, quarterly and annual trends, rental growth remained well above average.
“The softening in rental growth occurred in spite of an ongoing surge in overseas migration and a continued shortage in rental supply, suggesting an increasing portion of tenants are reaching their affordability ceiling,” Ezzy said.
“While rental demand from overseas migrants is likely to remain strong for some time yet, particularly across the largest capitals, we’ve already seen a reduction in domestic rental demand via an increase in the average household size.”
Aussies forking out $127 more per week
National rents are 27.4 per cent higher since the onset of COVID, equivalent to a $127-per-week increase in the median rent price in Australia.
Ezzy said there would likely be an increase in average household sizes as more renters make the shift to share-housing to share the rental burden.
Adelaide has also replaced Melbourne as the country’s most affordable rental capital, with the typical dwelling renting for $549 per week, compared to $551 per week in Melbourne.