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Tenants endured the biggest-ever rent increases last year, with national rents jumping by 10.2 per cent.
But while the cost-of-living situation is unlikely to ease, renters could soon get relief.
The pace of rental growth is showing signs of slowing, although rents in Sydney and Melbourne may buck the trend.
In the December quarter, rents increased by 2 per cent —compared to a 2.3 per cent rise in the September quarter — according to CoreLogic figures.
PropTrack data, also released this week, showed rental price growth steadying.
Eliza Owen, CoreLogic head of research, said December marked the second consecutive quarter that the pace of growth slowed, and it coincided with a small lift in the rental vacancy rate to 1.17 per cent in December — up from a recent low of 1.05 per cent the previous month.
"While a slowdown in the pace of rent rises could be a sign that the rental market is starting to shift, it's not great news for tenants just yet," Ms Owen said.
"Rents are still rising in most capital cities and regional areas, with vacancy rates low."
Canberra still most expensive Australian city to rent in
Looking at median weekly repayments, Canberra maintained its position as Australia's most expensive capital city rental market, with a median weekly rental value of $681.
Here's the breakdown:
- Canberra ($681 per week)
- Sydney ($679 per week)
- Darwin ($594)
- Brisbane ($588 per week)
- Perth ($553 per week)
- Hobart ($552 per week)
- Adelaide ($518 per week)
- Melbourne ($507 per week)
Melbourne officially remains Australia's most affordable capital city for renters, according to December quarterly figures.
Let's drill down into the most expensive and cheapest suburbs for renters in each capital city.
You can jump to the city you want to read by clicking below:
Australian rent values have risen 22.2 per cent since the start of the upswing in September 2020, marking the largest rental upswing on record based on the CoreLogic hedonic rental index.
During this 27-month period, the median weekly rent valuation across Australian dwellings increased from $430 per week to $519.
Similarly, Domain’s latest rental report found house and unit rents grew over the December quarter, recording their largest-ever annual increase across the combined capitals.
Nicola Powell, Domain's chief of research and economics, said asking rents were at historic highs across all cities, apart from Darwin and units in Perth.
"Rents are rising at the fastest annual pace ever seen across the combined capitals, and the number of vacant rental properties is at an all-time low for the month of December,” Dr Powell said.
A seasonal uplift in new listings is expected early this year, which will ease some of the pressure on rents.
Housing is draining people on low incomes
People on low incomes, who are increasingly renters, are spending more of their incomes on housing.
The inflation-adjusted incomes for the lowest fifth of households increased by about 26 per cent between 2003-04 and 2019-20 according to research from the Grattan Institute. But more than half of this was chewed up by soaring housing costs.
In contrast, the real incomes for the highest fifth of households increased by 47 per cent, and their after-housing incomes by almost as much: 43 per cent.
Correction still looking firmly entrenched
As for Australian home prices, figures this week showed national home values slumped 8.4 per cent since their peak.
Experts warn more falls are yet to come.
The main force behind the decline is the rate hikes in the back half of 2022.
The Reserve Bank's interest rate hiking cycle is expected to slow property investment as it limits the amount that can be borrowed.
While monthly declines continue to run at a slightly more moderate pace than in the third quarter, Westpac senior economist Matthew Hassan says the correction still looks "firmly entrenched", with the figures continuing to show broad-based declines across the major eastern states.
Between May 2022 and January 2023, Australian home prices saw a decline of 8.4 per cent, breaking the previous record in peak-to-trough declines, when home values fell 8.38 per cent between October 2017 and June 2019.