As Australia’s rental market continues to tighten to record levels, the pace of rental growth has slowed for the second consecutive month, possibly due to a seasonal lift in rental stock combined with affordability constraints.
CoreLogic’s Quarterly Rental Review for Q4 2022 shows the Australian dwelling market saw a slowdown in the pace of rent value growth to 2.0% in the December quarter. This was down from 2.3% growth in the September quarter, and a peak quarterly growth rate of 3.0% in the three months to May.
CoreLogic Head of Research and report author Eliza Owen said December marked the second consecutive quarter that the pace of growth slowed, and coincided with a small lift in the rental vacancy rate to 1.17% in December (up from a recent low of 1.05% in the previous month).
“The decline in quarterly rental growth rates observed in the December quarter was led by the capital cities where rents continued to increase but at a slightly slower rate than they have done in September and June quarters,” she said.
“While a slowdown in the pace of rent rises could be a sign that the rental market is starting to shift, it’s not great news for tenants just yet. Rents are still rising in most capital cities and regional areas with vacancy rates low.”
Since the start of the upswing in September 2020, Australian rent values have lifted 22.2%, marking the largest rental upswing on record (based on the CoreLogic hedonic rental index back series, which goes back almost 18 years). During this 27-month period, the median weekly rent valuation across Australian dwellings rose from $430 per week, to $519.
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