Radical Rise in Rent Costs Across Australia
Australian renters are feeling the squeeze as the latest Cotality review (formerly CoreLogic) reveals a near 44% surge in median rents over the past five years. The typical cap city now costs more than $700 per week, underscoring a housing market under pressure from limited listings and intense demand. With vacancy rates at record lows (about 1.47%), the market has transformed into a buyer’s or renter’s nightmare where prized properties are snapped up swiftly and outbidding becomes common.
Where the Pain Is Greatest
The national rent picture masks wide regional variation. Sydney tops the list of unaffordable capitals, with a median weekly rent of $807, followed by Perth at $729 and Brisbane at $696. Hobart remains comparatively affordable at $584 per week. Darwin posted the largest single-time increase, rising almost eight percent to a median of $687, while Melbourne edged up 1.4% to $615. In contrast, regional areas, though cheaper on average at around $591 weekly, still showed a notable 5.9% jump year-on-year, highlighting that the affordability squeeze is not confined to major cities alone.
The Mechanics Behind Higher Rents
Experts attribute the jump to chronic undersupply. “Limited supply continues to be a major catalyst in rising rents,” notes Kaytlin Ezzy, a Cotality economist. Listings are roughly 25% below the five-year average for this time of year, translating to fierce competition for a shrinking pool of rentals. This tug-of-war puts renters in a tough position: to secure a lease, many are forced to apply for less-than-ideal homes or engage in bidding wars that drive prices higher.
Impact on Renters
For renters, the environment is not just about sticker shock. Pack inspections, where multiple groups vie for the same property, create an intimidating and pressurized experience. Tenants’ Union of NSW spokesperson Leo Patterson Ross described the scene: “With these large groups trying to inspect the same place, it’s very intimidating.” The pressure extends beyond moving costs, influencing daily life within tenancies. Many renters report delaying or avoiding repair requests for fear of triggering rent increases or causing landlords to terminate leases.
Policy Gaps and Calls for Reform
Although reforms have started in some jurisdictions, there is a perception of uneven protection for renters. No-cause evictions have been restricted in parts of the country, and some areas have limited the frequency of rent hikes. Yet, there is a notable gap: a formal, CPI-linked guideline to cap excessive rent increases exists only in the Australian Capital Territory. As Ezzy explains, other essential markets – similar to water or energy pricing structures – lack a dynamic framework that ensures rent increases are fair and predictable. Supporters argue that stable, rules-based adjustments could help dampen volatility and provide a more transparent market for households and landlords alike.
Looking Ahead: Inflation and Interest Rates
Rent increases interact with the broader inflation picture. With rents constituting a key component of the consumer price index (CPI), the ongoing strength in rental value growth may influence future policy decisions and the path of interest rate adjustments. While some costs are easing in other sectors, surging rents complicate the inflation outlook and add pressure on households seeking relief through monetary policy.
Bottom Line for Australian Households
Rising rents, tight vacancy, and competitive inspections are redefining the renting experience in Australia. For roughly one in three households renting their home, the changes are not theoretical but immediately felt in weekly budgets and long-term planning. The current trend signals a need for coordinated policies that address supply constraints, protect tenants, and introduce fair, predictable rent pricing as part of broader housing market reform.
