Demand for rentals is at a heightened level and in some suburbs, enquiries from renters have increased by more than two-fold in the past 12 months.
The number of potential renters per listing is currently 1.7 times higher than February 2020. While it has been fairly stable over the past year, demand is still well above historical levels.
There are a few main reasons for this.
Average household sizes (AHS) decreased from 2.55 in late 2020, reaching their historical low of 2.48 in 2022. Although AHS has been trending upwards recently, it remains below pre-pandemic levels meaning that more dwellings are now required to house the same number of people.
According to the Australian Bureau of Statistics, 454,000 people migrated to Australia in the year ending March 2023. This is 3.6 times higher than a year prior. The return of overseas migration has also driven up demand for rentals as many migrants choose to rent homes rather than buy them.
To get a sense of the areas where demand is the highest, we looked at the suburbs with the largest annual growth in key enquiries per listing.
|Suburb||State||GCCSA||Key enquiries per listing||12 month % change in key enquiries per listing|
|Charleville||QLD||Rest of Qld||16||144%|
|Wiley Park||NSW||Greater Sydney||58||120%|
|Waroona||WA||Rest of WA||27||116%|
|St Kilda West||VIC||Greater Melbourne||70||115%|
|Nelly Bay||QLD||Rest of Qld||45||110%|
Menora in Perth topped the list with 78 key enquiries per listing. This reflected an enormous increase of 158% compared to September 2022.
Wiley Park in Sydney also became more popular among renters. The suburb had 2.2 times more enquiries per listing than a year prior.
Demand in capital cities has been particularly strong following the shift back to CBDs for work and study and we can see this in the fact that seven of the top 10 demand growth suburbs are in our capitals.
This is also reflected in their weekly advertised rent prices, which have increased by 12%.
Rents in Sydney, Perth and Melbourne grew most among our capital cities with prices 18%, 15% and 14% higher than September 2022.
Demand for rentals is expected to remain elevated for some time to come as vacancy rates hover at historical lows, supply shortages persist and migration continues to grow. Renters will likely face increased competition and rising weekly rent as a result.