Rental availability hits record low nationally

The Australian rental market continues to go from bad to worse.

The latest figures from PropTrack make for shocking reading for prospective and current renters, with the national vacancy rate declining 0.12 percentage points in February to 1.07 per cent.

Perth has the worst rental market in the country with a vacancy rate at a miserable 0.75 per cent, with Adelaide (0.83 per cent) and Brisbane (0.95 per cent) not far off that mark. A balanced market is regarded as being in the 2 to 3 per cent range.

Paul Ryan, Senior Economist, PropTrack, said little respite was coming for beleaguered renters.

“With rental market conditions extremely tight, competition for rentals is likely to remain tough,” he said.

“In the near-term, that is likely to continue to put pressure on rents and further strain rental affordability, which is already at its worst level in at least 17 years.”

Capital cities and regional areas both saw a decline in availability, with a larger fall in capital cities.

The lack of available properties for rent is creating unprecedented competition for the limited listed properties and driving up rents.

Singling out Perth’s chronically deprived rental market, where property price growth is also leading the nation and making it harder to get a foothold on the property ladder, Mr Ryan said rents have risen 17 per cent over the past year in Western Australia.

The interactive map below highlights where rents in Perth are at their most stressed.

“We’re still looking at seeing double digit rent growth over 2024, given where rental vacancy rates are and the momentum in rents at the moment, unfortunately,” Mr Ryan said.

“Areas such as Mundaring hit 29 per cent over the past 12 months and there’s a bunch of Perth regions that are above 20 per cent over the past 12 months.

“With conditions as they are now, it’s looking like we’ll see many regions top 20 per cent rent growth again this year (and) it wouldn’t surprise me if we saw another year of a very strong rent growth across Perth.”

Rental market has communities at breaking point

Suburbtrends’ latest release of the Rental Pain Index (RPI) for March 2024 reinforces the escalating crisis within Australia’s rental market.

Founder Kent Lardner said his newly released research in the March report showed an alarming trend where rental stress is not only persisting but worsening.

He said Western Australia and Queensland now lead the nation in rental hardship, with the majority of their suburbs facing unprecedented levels of stress.

“This is not just a market fluctuation; it’s a clear signal of a deepening crisis that requires immediate attention.”

“Specific areas such as Hamilton Hill in WA and Emu Park in Queensland are experiencing some of the severest strain, with RPI scores at the maximum limit of 100.

“These communities are at the breaking point,” Mr Lardner warned.

“With rental affordability consuming upwards of 30 per cent of household incomes and vacancy rates at critically low levels, the situation for many Australian renters is becoming untenable.

“The worrying trend is that the affordability squeeze is triggering a domino effect, potentially rendering the most vulnerable households homeless at an unprecedented rate by year’s end.

“We're observing a distressing pattern that may lead to a significant increase in homelessness among the most vulnerable populations and the data demands not just our attention but immediate action to prevent a social disaster.”

Mr Lardner called for urgent policy innovation in light of these findings.

“The current data compels us to rethink our approach to housing.

“Considering the success of mobile home villages in providing affordable housing solutions internationally, it’s crucial for Australia to explore similar alternatives.

“Prefabrication technology could be a game-changer, offering quicker, more affordable housing options to combat the rental crisis.

“Now, more than ever, innovative and bold policy solutions are needed to address this widespread rental stress.”

Eviction rules under the national microscope

The ACT’s government has become the first to remove all forms of tenancy termination without a legitimate cause, amid a raft of changes that also bans encouraging rental bidding.

No-grounds evictions are also set to be banned in New South Wales for renters on rolling leases.

The move has bipartisan political support and will also include legislation extending notice periods for the end of fixed-term leases from 30 days to 45 days to allow renters more time to find a home, introducing optional longer lease agreements of three or five years, a portable bond scheme and regulating data collection from renters.

Tenant advocacy groups have long tried to reform no-grounds evictions, describing this as the single most important law reform for renters.

Not everyone saw it as a positive outcome.

Tim McKibbin, Chief Executive, Real Estate Institute of NSW, said a blanket approach to no-grounds evictions was inappropriate.

“There are many reasons for a landlord wanting to take possession of their property,” he said.

“A lot of those reasons are personal – marriage breakdown, health, elderly parents and children requiring the property.”

WA is the only state which hasn’t or isn’t planning some form of ban on landlords evicting tenants without giving a reason.

The Federal Government has reiterated that building more homes — rather than imposing rent controls, as The Greens continue to demand — is the key to easing pain for renters in the long-term.

“We won’t take the pressure off rents in an enduring way unless or until we build more homes in this country,” Federal Treasurer Jim Chalmers said on Wednesday (13 March).