Rental Growth Eases, Affordability Still a Challenge

The pace of rental growth across Australia slowed significantly in 2024, signalling that the market may have passed the peak of its recent boom. CoreLogic’s Quarterly Rental Review reports a 0.4% rise in national rents during the December quarter—the smallest Q4 increase since 2018. Over the year, rents rose 4.8%, down from the 8.1% surge in 2023.

Despite the moderation, affordability remains a key challenge. Since the onset of COVID-19, national rents have risen by 36.1%, equating to an additional $8,884 annually for the median renter. Renters now allocate approximately 33% of their pre-tax household income to cover rent—the highest proportion since tracking began in 2006.

On the supply side, increased investor lending and easing demand from overseas migration have contributed to a slight recovery in vacancy rates, now at 1.9%—up from a low of 1.4% in late 2023.

Rental dynamics also vary across regions:

  • Regional areas recorded stronger annual growth (6.2%) than capital cities (4.3%).
  • Sydney remains the most expensive rental market at $773 per week, followed by Perth ($695) and Canberra ($667).
  • Hobart continues to offer the most affordable rentals among the capitals at $554 per week.

Gross rental yields nationally held steady at 3.7%, with variations across capital cities driven by shifts in dwelling values and rental growth.

These trends underscore the evolving dynamics of Australia’s rental market as affordability and supply pressures persist.

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