Rents rose at record levels last year

For property investors, 2022 was one for the history books.

To begin with, capital city rents increased by 14.6% for houses and 17.6% for units, according to Domain – both of which were records.

Furthermore, the year ended with an unprecedented seventh consecutive quarter of house rent rises and sixth of unit rent hikes.

“”Just over 10 years ago, in 2010, rents were flatlining. But we’re now facing a period of exceptional rental growth, and across all capital cities. It’s historic. And the crux of it all is that we have a severe housing shortage, high demand and a lack of investor activity,”” according to Domain chief of research and economics Nicola Powell.

Domain noted that the number of vacant rental properties is sitting at an all-time low across the nation.

Low supply generally means high demand, which puts upwards pressure on rents.

“It’s a situation that’s been building for a while with a lack of housing supply, high demand and a lack of investor activity,” Dr Powell said.

“We don’t have an advanced build-to-rent sector like the UK, we don’t have enough social housing, which has forced more people into the private rental market, and we’re now seeing overseas migration restart as well as overseas students and tourism and more lucrative short-term leasing. There’s just no quick fix for this.”

City-by-city breakdown

While rents increased 14.6% for houses and 17.6% for units across the combined capital cities, how did the individual markets perform during 2022?

For houses, rents increased by:

Sydney = 12.1%
Melbourne = 7.9%
Brisbane = 14.6%
Perth = 15.2%
Adelaide = 11.1%
Hobart = 10.0%
Canberra = 3.0%
Darwin = 5.1%

For units, rents increased by:

Sydney = 18.6%
Melbourne = 20.0%
Brisbane = 14.3%
Perth = 10.3%
Adelaide = 14.3%
Hobart = 9.4%
Canberra = 5.7%
Darwin = 8.3%

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