Brett Warren , National Director – Metropole Group
The latest CoreLogic Quarterly Rental Review for the March quarter saw a 1.7% rise in national rents, highlighting a seasonal trend.
It’s important to note that it’s the slowest quarter one growth since 2019 and significantly below last year’s 2.7% lift for the same period.
According to CoreLogic Economist Kaytlin Ezzy, rental growth is moderating, with the 12-month change dropping from the 8.3% peak in 2024 to 3.8%.
For investors, this moderation underscores the shifting dynamics of the rental market. The average household size has increased, driven by affordability challenges, while slowing population growth has further eased rental demand.
Despite these factors, advertised rental listings remain limited, leading to tightened vacancy rates at 1.6% in March, just above the record low from the previous year, according to the review.
What’s catching the eye of savvy investors is the renewed growth in unit rents. Units experienced a 2.3% rise in rents over the quarter compared to houses at 1.4%.
This shift could be linked to the seasonal demand from international students, alongside the affordability gap between houses and units influencing renter preferences.
While houses have enjoyed stronger rental premiums in recent years, investors may find opportunities in attached dwellings as unit rents gain momentum.
Across Australia’s capital cities, according to CoreLogic, Hobart led the rental charge with a 2.3% quarterly rise, followed by Perth, Brisbane, and Adelaide.
Sydney and Melbourne rebounded after previous declines, showing signs of recovery with 1.4% and 0.8% gains respectively in the March quarter.
Investors in Perth and Adelaide are enjoying annual growth rates of 6.3% and 5.5% respectively, while Hobart remains the most affordable rental capital, and Sydney continues to command the highest rents.
For long-term investors, the key takeaway is the likely continuation of stable rental growth amidst moderating demand and affordability pressures.
Since 2020, rents have risen significantly, prompting renters to adapt through shared accommodation or delayed independent living. Migration trends further support this easing demand.
The rental market remains tight, but understanding the subtle trends will be the game-changer for investment strategies.
