Everything you need to know about the Aussie rental market this February

Article by PropertyMe 6 March 2023

Here’s everything you need to know about the rental market right now if you’re renting in Sydney, Melbourne, or Brisbane. 

We all know Australia is in the midst of a rental crisis — but just how limited is the supply of properties?

To get a better idea, we can compare the number of properties available for rent today versus one year ago. Specifically, there are now approximately 17,000 fewer properties for rent compared to 12 months ago, according to SQM Research.

Unsurprisingly, vacancy rates have dropped back to record lows, sitting at just 1%. The slight rise in vacancy rates over December 2022 did not last long.

Key takeaways for renters this month

• The cost of renting in Sydney has increased 32% over the past year
• Melbourne no longer in top three most liveable cities in the world
• Brisbane was recorded to have the lowest vacancy rate out of the three major capital cities
• Expert Louis Christopher predicts a drop in household formation may provide “some relief”

How does your city stack up?

In terms of vacancy rates, every city in Australia except Hobart recorded a drop. SQM Research suggested this fall was likely due to the increased demand from international students early in 2023.

Sydney

The median weekly cost for a dwelling in Sydney was recorded at $757 — a whopping 32% increase over the past year.

Vacancy rate

This sharp increase in rental prices is reflected in the 1.3% vacancy rate.

With such low vacancy rates, it’s no surprise there’s a drastic rise in demand and prices.  

But just how much are asking rents rising? 

The true cost of rentals 

Some areas are noticing an increase of over 50% compared to the same period 12 months ago. 

For example, the average weekly asking rent for a 2-bedroom unit in Sydney CBD sat at $1,103 in December 2022. If you were looking to rent the same property today, this now sits at $1,299 – a giant increase of over 50.9% from one year ago (as of 28 Feb 2023).

Melbourne

The median weekly cost to rent a house in Melbourne is $638, while the average unit cost is $493. 

Overall, the cost to rent across units and houses combined has risen by 26% in Melbourne over the past year.

Vacancy rate

Over January, the vacancy rate was recorded as being slightly lower than Sydney’s – sitting at 1.2% in Melbourne.

Number of available properties  

The number of available vacancies in Melbourne has dropped substantially. There are currently just over a third of properties available now compared to a year ago – specifically, there are now 10,665 fewer properties.

Each of the major cities saw a decline in the number of available vacancies compared to the same period a year ago.

The cost of rentals 

One of the biggest increases in rental prices can be seen in Melbourne CBD where the median weekly price of renting an apartment hit $642 – a 44% increase compared to one year ago, according to SQM Research.

Melbourne loses its spot on the livable cities list

In other news, Melbourne also saw a drop in its “liveability” rating. According to the Economist Intelligence Unit’s (EIU) annual survey of the world’s most liveable cities — Melbourne isn’t what it used to be. 

From 2002 – 2019, Melbourne was ranked as one of the top three places to live in the world. However, over the COVID-19 period, Melbourne has lost its spot. Dropping to tenth place. 

Brisbane

The median weekly cost for a dwelling in Brisbane was recorded at $604 – a 26% increase compared to one year ago.

Vacancy rate 

The lowest rate out of the three major capital cities was recorded in Brisbane, sitting at 0.8% in January 2023.

Asking rents 

The table below shows the difference in asking rents for houses and units in Brisbane’s CBD. 

What do the next few months look like for Australian renters?

Louis Christopher, Managing Director of SQM Research highlighted, “We are expecting a further tightening in rental vacancy rates over… February”. He continued, “the months of February and March will be the most difficult time for tenants in the national rental market in many years.” 

On the other hand, however, Louis Christopher noted, “Thereafter we are hoping for some relief given the expected increases in dwelling completions and an overall reduction in housing formation.”

Like us to include anything specific in our update? We’re always open to hearing your ideas! Email us at [email protected].

About the data:

The findings in this report are based on the latest insights from SQM Research as of 2 March 2023. SQM Research is an independent investment research institute that specialises in providing accurate property market data. It is operated by one of the country’s leading property analysts, Louis Christopher.