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Capital city rents surge 13% in 2023 as regions flatline

Rents in the capital cities surged over the past year, led by Sydney, Melbourne and Perth, while regional renters enjoyed a reprieve, with rents remaining flat since June.

Rental markets are extremely challenging for renters, with rents continuing to grow very quickly across much of the country amid strong demand and very low vacancy rates.

Across the country, median advertised rents rose 1.8% over the December quarter to $580 per week, PropTrack data shows. That brings rents up 11.5%, or $60 per week, compared to a year ago.

But conditions remain especially tough in the capital cities where rents are growing at double-digit rates, with Sydney, Melbourne and especially Perth renters facing very strong growth.

Across the combined capital cities, rents surged 13.2% compared to the same time a year ago, bringing them to $600.

Perth has seen the fastest rent growth over the past year – reflecting its incredibly low rental vacancy rate, the second tightest behind Adelaide. Perth has seen rapid growth for a number of years, and median advertised rents are now up 66% compared to pre-pandemic.

Units in Sydney, Melbourne and Brisbane have seen particularly sharp increases in the past year, up 15% to 17%.

Investors are returning to the market, and that’s good news for renters

But there are some signs that rent growth may be slowing, and some relief on the horizon. While rents are still growing very quickly, rent growth in 2023 was slower across the combined capital cities compared to 2022.

The outlook is slightly better for regional renters. Median advertised rents have been stable for two consecutive quarters, sitting at $500 per week since June.

As we head into what is typically the busiest time of year for rental markets in January, renters will, unfortunately, continue to face growing rents. There may be some relief on the horizon, with signs that growth is starting to ease.