After three tough years for regional renters, it looks like conditions might finally be starting to ease.
Rental markets in regional areas have been extremely tight since mid-2020, when larger-than-typical population flows from capital cities to regional areas soaked up much of the available rental stock.
Since then, regional rental markets across the country have had few available rentals. Rental vacancy rates — which measure the number of available rentals as a share of the total number of rental properties — have been sitting at, or even below, 1% regionally. That’s substantially lower than pre-pandemic.
The consequence of this limited availability of rentals has been rapid increases in rents.
Rents in regional Victoria have gone from $340 a week to $420 today, while in regional NSW rents rose from $390 to $495. In regional Queensland, rents grew from $390 to $520 per week, a whopping $130 increase.
In regional WA, rents have grown particularly quickly, from $350 pre-pandemic to $520 today. That follows a number of years in which rents in regional WA had been falling, following the end of the mining investment boom.
But there are signs that conditions are starting to improve.
Rental vacancy rates have been drifting up across regional areas over the past 12 to 18 months.
Regional NSW has seen vacancy rates move from less than 1% a year and a half ago to 1.7% today. In regional Victoria, vacancy rates are currently sitting at 1.3%, which is still very tight, but is an improvement from late-2021 when vacancy rates were sitting at just 0.7%. Even regional SA, which remains the tightest regional market, has seen vacancy rates ease a little to 1.1%, up from just 0.7% in late-2021.
While these improvements will be a welcome reprieve for regional renters, conditions are still tough. Availability remains limited in regional markets – especially in regional SA. But conditions have improved, and are continuing to do so, which is a good sign for regional renters.
That improvement in availability is also showing up in rents. Rents regionally have been flat, or even declined a little, over the past 6 months in most regional areas.
Again, these are not large changes, particularly relative to the substantial run up in rents when compared to three years ago.
With vacancy rates beginning to ease, and population flows from capital cities returning to more-typical levels after the pandemic, we are unlikely to see the same pressure on rents that we did over the past three years, which will come as welcome news for regional renters.