Rent crisis: Foreign students, Airbnb blamed for rent crunch

Aussies are being priced out of their apartments as rent prices for units skyrocket.

The Domain Rent Report found unit prices had been growing at a faster rate than houses as foreign students flooded back into Australia.

Capital city units saw the highest quarterly and annual growth ever recorded, with the rental squeeze showing few signs of easing.

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Unit rents were up by 6.5 per cent over the September quarter and 16.7 per cent annually.

House rents lifted by 1.9 per cent over the quarter and 12.8 per cent for the year.

Domain research and economics chief Nicola Powell said the return of foreign students and tourists had ramped up demand.

“The misalignment between supply and demand has resulted in increased rents,” Powell said.

“On the supply side, we have seen delays in building completions - due to supply chain issues - weaker investment activity and the conversion to short-term rentals as tourists return.

"The consecutive run of interest rate hikes may have also pushed some landlords to pass on additional home loan costs.”

Capital city breakdown

Sydney’s record-breaking streak continued over the September quarter, with house rents jumping 4.8 per cent to a new record high of $650 a week.

This was the steepest annual increase since 2009, at 14 per cent.

Unit rents are also at a record high of $550 a week for the first time since 2018, after a 4.8 per cent surge over the quarter.

While it has been the norm for house rents to be smashing new highs since the beginning of last year, this was a stark change for unit rents, indicating that the affordability issues of renting a house have made budget-conscious tenants shift to units.

Sydney is now tied with Canberra as the most expensive city to rent a unit, and remains the second-most expensive city to rent a house.

Melbourne’s rental market turnaround has almost fully recovered from the pandemic.

House rents increased 2.2 per cent over the quarter to a new record high of $470 a week.

Despite this, Melbourne still reigns as the most affordable capital city to rent a house.

Meanwhile, unit rents jumped 3.7 per cent over the quarter to $425 a week, the sharpest annual increase since 2008, at 14.9 per cent.

In Brisbane, house rents surged to a new record high of $550 a week.

They experienced the longest stretch of continuous unit rental price growth on record, with unit rents now at $460 a week.

Brisbane is now the fourth-most expensive city to rent a house for the first time in roughly six years.

Adelaide continues to reign as the most competitive capital city to find a rental in Australia, due to a supply problem exacerbating the rental crisis.

House rents are at a record high for Perth, 11.1 per cent higher than last year, while unit rents jumped 5 per cent over the quarter.

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