Tiny town rents surge by up to 50% in regional Australia

Rents across Australia are surging, with new data showing some areas have experienced a 50 per cent increase in rents in the past 12 months.

Regional areas are experiencing unprecedented demand for rental properties which has led to a surge in rents in many small towns.

Data from PropTrack has found that nine out of the top 10 suburbs that saw the biggest increase in median house rents were in regional areas as the desire for more space and a regional lifestyle continued.

Meanwhile, inner city suburbs in the capitals saw the biggest hike in unit rents as higher-density living becomes more popular post-COVID.

Regional Areas

Katanning, a small town in Western Australia, has seen a 47 per cent increase in median house rent to $375 per week, bought on by the town’s growing popularity as a regional hub..

In South Australia, Port Broughton has seen a 43 per cent increase in median house rent to $340, given the town’s proximity to the beach and growing demand for holiday rentals in the area.

In Queensland, Gatton has seen a 41 per cent increase in median house rent to $460, with the town’s location near the University of Queensland’s Gatton campus and the growing popularity of regional living having led to higher demand for rental properties.

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A growing demand for holiday rentals means Port Broughton rentals have gone up 43% to $340. IMAGE Exploring South Australia

Inner City Suburbs

Melbourne’s inner city suburbs have seen the biggest hike in unit rents, with a 42 per cent increase in median unit rent to $540 per week as, as more people want to live closer to the city and its amenities post-COVID.

In New South Wales, Darlington has seen a 38 per cent increase in median unit rent to sit at $565, while The Rocks, also in New South Wales, has seen a 35 per cent increase in median unit rent to $975.

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Lack of supply

PropTrack Economist, Anne Flaherty said the main factor driving rent increases is a lack of supply: “Vacancy rates are at or close to record low levels across many markets.

“This means that for each rental property available, there are more prospective tenants competing, and this is driving up prices” she said.

Ms Flaherty said the surge in immigration is contributing to the rental crisis, as most new arrivals are students and renters.

She said, “The return of international students and migrants is adding to the competition for rentals. These students are now returning, which will further add to demand for rental properties.”

To alleviate the current rental crisis, Ms Flaherty said that governments need to prioritise policies that increase supply: “Ultimately, the solution to alleviating the current rental crisis is for governments to prioritise policies that expedite and promote the development of new homes.

“The speed at which new homes can be developed has been hampered over the past year by a combination of higher interest rates, longer construction timelines, material and labour shortages, and significant rises in input costs.

“These factors have forced developers to temporarily shelve many approved projects” she said.

Article source: Queensland Property Investor