House rents have remained flat for six months, while unit rents have continued to rise. We expect the price gap will continue to narrow in the coming months.
Strong demand for inner city living post-pandemic, coupled with the rapid rate of population growth and an undersupply of available properties has continued to put pressure on rental costs, particularly in the major capital cities.
Advertised rental prices were 3.8% higher nationally over the September quarter, according to PropTrack, a slightly lower rate of growth than the 3.9% increase over the June quarter.
But annually, rental costs continue to gather pace with median advertised rental prices rising by 14.6% over the year to September, up from annual growth of 14% the previous quarter, and 10.3% in September 2022.
Growth in the capitals is outpacing growth in the regions. Over the past year, capital city rents rose 12.2% while regional rents were just 6.7% higher.
Regional WA, Melbourne and Sydney saw the strongest rental growth over the past quarter, while Hobart, Canberra and regional Tasmania saw the largest falls.
Rents are climbing at a rapid pace. The median advertised house rent is now $550 per week and the median advertised unit rent is now $520 per week.
Unit rents were 4% higher over the quarter and 15.6% higher over the year. House rents were unchanged over the quarter and 10% higher over the past year.
Rental growth is likely to continue in the major capital cities. The flatlining of regional rents over the past six months may point to softer rents for the regions in the coming months.
As inner city demand continues to grow, we expect the difference in price between houses and units will further narrow in the months ahead.