As the rent crisis worsens and the cost of living skyrockets, new data shows desperate tenants are on the move in search of a home.
Analysis by PropTrack has revealed the most popular suburbs for rental properties, with intense competition forcing many further out from city centres.
The number of available rentals has slumped by almost 15% nationwide over the past year and is now a mammoth 33% lower over the past five years.
Rental prices are becoming too high for many renters within the city. Picture: Getty
Real estate industry giant Owen Wilson, chief executive officer of REA Group, publisher of realestate.com.au, described the shortage of available rental properties as “dire”.
Demand is also high, with rental enquiries growing by more than 8% last year. It’s 140% higher than pre-pandemic levels.
The climate of high demand and low supply is leading to a sharp rise in rental prices.
Properties available to rent under $400 per week represent just 17.6% of the market, which is down from 32.8% a year earlier and from 42.5% at the start of the pandemic.
Bills are also becoming more expensive, with a report by Better Renting finding the majority of tenants surveyed spent summer in unhealthy indoor temperatures exceeding 25C for more than 10 hours a day, and in excess of 30C for more than an hour a day, in a bid to save money on power bills.
Tenants look to the ‘burbs for relief
The latest PropTrack data indicates rising price pressures are forcing tenants to look for cheaper living alternatives further afield.
“The cost of living has risen rapidly over the past year, with price rises felt across the board,” PropTrack economist Anne Flaherty said.
“Unfortunately, many of the categories that have seen the largest price rises are those that Australians have no choice but to spend money on – food, transport, and housing.
“For many tenants, the cost of living has been exacerbated by rapid rent growth due to an undersupply of rentals amid growing demand to rent.
Living further away from the city is appealing to renters seeking cheaper rent. Picture: realestate.com.au
“In response to higher rents, many tenants are looking further out, where prices are typically more affordable.”
Ms Flahertly added that the new hybrid model of work, which many workplaces adopted during Covid, lends itself to living further away from a CBD.
“Changing work practices have also altered where many tenants are choosing to live. With less time spent commuting, many tenants are opting to live further away from their workplaces in favour of ‘greener’ suburbs.”
The suburbs seeing the highest number of prospective tenants per available rental listing tend to be in scenic areas, be it hinterland or waterside, and within a one-hour commuting distance from a city centre, she said.
The Basin in Victoria is the second most-popular suburb nationally with 108 potential renters per listing.
Julien Karolos, director or LJ Hooker Boronia, said he’s consulting with renters currently who are looking to escape high prices in the city.
“Just recently, I had three offers on a property – one was renting in Hawthorn, one was renting in Caulfield, and the other was renting in Oakleigh, but they just simply couldn’t afford it,” Mr Karolos said.
Mr Karolos said The Basin is popular with renters because it’s only 35km from the CBD, very well connected, and offers a more laidback lifestyle surrounded by nature.
“There aren’t that many rentals in the suburb – I think there are only a few live listings in The Basin at the moment, so when they do come onto the market, renters act fast,” he said.
Middle to outer ring suburbs in Brisbane are also proving popular with tenants seeking units, with seven of the top 10 most popular areas within Greater Brisbane.
Berrinba, which is south of the Queensland capital, had the most potential renters per unit listing with 295, while Durrak in the south west of the city was the second most sought-after with 177 per listing.
Some tenants need to live inner-city
Despite the shift into the subburbs, PropTrack data found tenants are still eyeing off inner-city Melbourne pockets, with Burnley featuring as the most popular suburb in the country for both houses and units with 113 potential renters per listing.
Ms Flahertly said those searching in the inner-city probably need to live there for work or study.
“Rental properties in CBDs have also seen a resurgence in demand – driven largely by the return of in-person learning at universities, and a surge in international students and new migrants, who typically opt to live closer in to cities,” she said.
Jenn Durling, department manager of new business at Biggin Scott in Richmond, said Burnley has always been a popular destination for renters.
“It’s got everything – really great cafes and restaurants, access to the train station, which takes you straight into the city, and the freeway entrance is also close by,” Ms Durling said.
Ms Durling said it’s not just Burnely that’ popular with renters, but the surrounding pockets of Richmond and Cremorne.
Since renters have returned to the city post-Covid, she said open homes have been inundated.
“I had one [listing] on Buckingham Street in Richmond and we had 50 people through last week and we are capping them at 50 people, so I’m sure there would have been more if we hadn’t capped it.
“One and two bedroom homes are being snapped up and people are begging to move in – we were recently offered three months rent in advance for one.”
Ms Durling added that the competitive nature of the rental market in Burnely and the surrounding suburbs comes down to high demand from both international students and those who need to return to the workplace full-time.
“I think some renters are now being asked to come back into the office.
“Living further out in say Warrandyte or Mornington is OK when you only have to commute two days per week, but when it’s five days per week it’s hard to justify living that far.”