Australian tenants paid more for rents over the first quarter of the year as competition for the limited rental stock intensified.

REA Group’s PropTrack Rental Report showed a 4.7% increase in weekly rental prices in Australia, the strongest annual gain since 2015.

The increase was apparent across capital city and regional markets, with the latter posting a stronger quarterly and annual growth.

Over the first three months of the year, weekly rents across combined regional markets rose by 10.3% year-on-year versus the 1.1% gain for capital cities.

In terms of property type, houses maintained its more solid position than units after reporting a 6.7% year-on-year increase in rental prices compared to the latter’s 2.4%.

PropTrack director of economic research Cameron Kusher said the demand for rental homes remains near record high levels nationally, sitting at an historic peak throughout the combined capital cities in March 2022.

“The volume of properties listed for rent at a national level has continued to reduce over recent months, exacerbating shortages of stock and pushing the cost of renting higher,” he said.

In fact, while new listings increased monthly over March, they fell on year-on-year terms.

Furthermore, despite this monthly gain, new listing volumes were still 12.5% lower than their 10-year average.

This has affected the total listings, which have fallen by 5.4% monthly and 26.9% year-on-year, hitting the lowest level since August 2003.

Mr Kusher said there is some evidence that some of the rental pressures have started easing in certain regional areas.

“Sunshine Coast, Geelong, and Southern Highlands and Shoalhaven are three prevalent markets where several indicators suggest rental demand is slowing,” he said.

“Other regional areas may see similar trends emerge as those who moved during lockdowns either decide to stay and potentially look to purchase rather than rent, while others may now look to relocate back to the major cities given that they have re-opened and lockdowns have ended.”

Still, Mr Kusher said renting remains tough for many Australians across the country, a condition that could potentially exacerbate with the re-opening of international borders and the re-commencing of migration.

“This is expected to be most prevalent in Sydney and Melbourne, the two largest rental markets in the nation and the two markets that have, until recently, been experiencing falls in rental rates,” he said.

“While the increase in investor purchasing that has been occurring should add to supply in the market, it will take time for this additional purchase activity to alleviate the current supply pressures.”

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