‘Worst is over’: Where rents are falling

Finally some relief for tenants with the latest data showing falls in rents in hundreds of suburbs across the nation, as experts say the worst could be over.

The latest PropTrack rent figures for every suburb reveal a spike in investor purchases and more first homebuyers fleeing the market has freed up more rental stock — putting the brakes on rent hikes.

The data shows there has been a sharp increase in the number of suburbs where rents have declined since April, particularly in Sydney and Brisbane, with one industry analyst declaring

“rental rises of 10 to 20 per cent per annum are now over”.

Sydney tenants have finally been given much needed relief after battling the worst rental conditions in a generation, with a quarter of suburbs recording a reduction in average weekly rent over the past three months.

The unexpected turn in market conditions has seen landlords slash their rents by up to $150 in some inner city suburbs.

Rents in more than 230 Queensland suburbs have also fallen in just three months, saving some tenants over $100 a week in some inner Brisbane suburbs and Gold Coast locales.

The rental crisis is still alive and well in Melbourne though, with double digit increases in rent for houses in the inner suburbs.

But PropTrack senior economist Paul Ryan said Melbourne rentals remained relatively good value relative to the rest of the nation.

“Typical rents for houses were like $580 (a week), that’s cheaper than every other capital city except for Hobart,” Mr Ryan said. “More affordable rent is something that brings people to Melbourne.”

PropTrack director of economic research Cameron Kusher said the metrics showed rental pressures were finally easing, which was good news for tenants.

“We have seen a big increase in investor borrowing which leads to more stock on the market, more first home buyers exiting the market which also frees up rental stock and more people being forced into sharehouses or back home with family because rental affordability is no longer viable for many,” he said.

But Mr Kusher also warned investors to do their research in order to avoid overpaying as values continued to rise as rents began to fall.

It comes as SQM Research reveals capital city asking rents have recorded the largest monthly falls since the outbreak of Covid.

Sydney recorded a decrease in combined rents — dropping by 1 per cent to $829 per week, while Melbourne also recorded declines of 0.6 per cent to $632 per week.

Brisbane and Perth also recorded falls in rents of half a per cent and 0.6 per cent, respectively, in July.

SQM Research managing director Louis Christopher said the falls were broad based, with the larger falls recorded in the larger capital cities and regional coastal locations.

“For the past 30 days, SQM Research has recorded the largest decline in capital city rents

since the days of 2020 when Covid first hit the country,” Mr Christopher said.

“It should be noted of course that rents are still very high and this retracement is minor

compared to the massive rise in rents recorded around the country since 2021. And, it

should also be stated that the rental crisis is still not yet over as we have recorded an

ongoing low national rental vacancy rate of just 1.3 per cent.

“But, still, this will be somewhat welcoming to tenants and as a research house, we do

believe the market rental rises of 10 to 20 per cent per annum are now over.”