Home / Property / Seasonal change deepens property rental market extremes: SQM Research

Seasonal change deepens property rental market extremes: SQM Research

The nation's rental crisis is deepening, with available dwellings across major cities at just one per cent and the asking price for rents reaching eye-watering levels. According to SQM, seasonal factors are also coming into play.

Despite the consensus (and RBA) prediction of lower interest rates at the back end of 2024, the current cash rate of 4.45 per cent continues to inflate mortgages and warp the rental market out of its natural shape. Add to this a seasonal bump in students looking for rentals due to the start of a new semester, and the extreme state on rental markets deepens further.

Vacancy rates in the Sydney CBD, Melbourne CBD and Brisbane CBD all decreased over the month of February, by 3.3 per cent, 2.7 per cent and 2.1 per cent respectively according to SQM Research. Rental vacancies across the country have now dropped around 6 per cent from 32,040 in February 2023 to 30,161 in February 2024.

Asking prices present an equally grim picture for those looking to rent, according to SQM.

  • Over the past 30 days to 12 March 2024, capital city asking rents for all units rose by a further 1.2 per cent with the 12-month rise standing at 11.4 per cent,” the group stated in its most recent monthly update. “Melbourne recorded the fastest increase of 1.5 per cent.”

    The national median weekly asking rate for a dwelling (houses and apartments) is now $721 per week, SQM reports. “Sydney recorded the highest weekly rent for a house at $1,054.16 per week. While Adelaide units again offer the best rental affordability of all capital cities at $457.72 per week.”

    The year-on-year increase in rent prices across capital cities is rising at a consistently high level. In Sydney the combined increase across units and houses is 11.1 per cent YOY, while in Melbourne it stands at 12.6 per cent. Things are a little easier in Brisbane, with an 8.5 per cent combined increase, while in Perth the increase stands at 17.3 per cent in the past 12 months.

    According to SQM Research managing director Louis Christopher the inflamed rental dynamic is currently being exacerbated by a seasonal influx of students.

    “Our rental market update today reveals a further decline in rental vacancy rates cross the nation. Most likely the fall in rental vacancies was driven by increased demand from tertiary students following the start of campus semesters for 2024,” Christopher stated. “As well as graduates entering the workforce for the first time. It is a seasonal demand increase we see at the start of each and every year but is most certainly problematic due to the fact the current rental market remains in crisis.

    “Going forward, we believe vacancy rates are likely to decline again for the month of March as thus far weekly rental listings have fallen since the start of the current month.”

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