Have We Reached the Peak of the Rental Boom? By Leigh Martinuzzi @ MPG

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Have We Reached the Peak of the Rental Boom?

By Leigh Martinuzzi from MPG 

The Australian rental market has been a rollercoaster in recent years, with escalating rents and high demand creating significant challenges for tenants. However, new data suggests we may have reached the peak of the rental boom, signalling a potential shift in market dynamics.

CoreLogic’s latest analysis reveals that rental price growth slowed to 4.8% in 2024, compared to the sharp increases of 8.1% in 2023 and 9% in 2022. While this easing offers some relief to tenants, it’s worth noting that rents remain significantly higher than pre-pandemic levels. Vacancy rates remain critically low at 1.1%, far below the long-term average of 2.8%, continuing to fuel competition for available properties.

City vs Regional Markets

Capital city rents grew by 4.3% in 2024, slightly under the 6.2% increase in regional markets. The return of international migration has driven demand in urban centres, with students and workers flocking to cities. This trend is particularly evident in Sydney, Brisbane, and Melbourne, where rental markets are experiencing strong demand despite affordability challenges.

Lifestyle-focused regional areas, such as the Sunshine Coast, remain desirable but are seeing a stabilisation in rental growth. The combination of limited supply and ongoing demand from families and professionals ensures that these markets continue to perform well.

Affordability Under Pressure

Median rents nationally now sit at $658 per week for houses and $607 per week for units, according to CoreLogic. These figures highlight the affordability strain on tenants, with rental costs consuming a larger proportion of household income than ever before. With wage growth struggling to keep pace, many tenants face difficult decisions about where and how they live.

What’s Next for Rentals?

Looking ahead to 2025, CoreLogic forecasts a continued moderation in rental price growth. Improved supply, particularly in capital cities, is expected to help ease pressure, but the market will remain tight due to ongoing population growth and insufficient new housing construction.

The Sunshine Coast continues to be a standout for investors, offering strong rental yields and demand for high-quality homes in premium locations. For landlords, it’s an opportune time to focus on property presentation to attract tenants and secure optimal returns.

The Sunshine Coast Perspective

The Sunshine Coast rental market remains competitive, with high demand for well-located properties. While growth has slowed, the region’s lifestyle appeal continues to draw renters. The median rental price for houses and units in the area reflects the high demand, making it a lucrative market for property owners and investors.

Final Thoughts

While the peak of the rental boom may have passed, affordability remains a challenge for many tenants. For investors and landlords, this presents an opportunity to capitalise on strong demand while focusing on competitive pricing and property quality.

If you’re navigating the rental market, whether as a tenant, landlord, or investor, staying informed is essential. For tailored advice and insights into the Sunshine Coast property market, contact the team at Martinuzzi Property Group. Let’s make 2025 a year of informed and successful property decisions.

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