Rent prices skyrocket as Australia suffers COVID-19 outbreak

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Rent prices in Australia have risen at the highest rate in over 10 years (Source: Getty)

Rental prices in Australia have increased at an annual rate of 6.6 percent, the highest since January 2009, at a time when and the nation is struggling with more.

CoreLogic shows that regional rents continued to exceed rents in capital cities, increasing 2.7%, compared to an increase of 1.9% in capital cities.

Despite slowing growth in recent months, annual rental growth in regional Australia reached 11.3% in June 2021. This is the highest annual growth result on record, the index CoreLogic rents starting from 2005.

CoreLogic’s Australia head of research, Eliza Owen, said Australia has not seen such a high rental value increase in more than a decade.

“After subdued rental performance for much of the 2010s, the Australian rental market has seen a rise in values ​​due to many of the same factors that have led to the current rise in house prices,” she said. declared.

“These factors include increased government stimulus through COVID-19, accumulated household savings during lockdown periods, rapid economic recovery seen as easing restrictions and a lack of rental supply. in some markets have also exacerbated rental price increases, especially in large regional centers. Australia.”

Owen said rent prices are growing decelerating, as are house prices, nationally and in capital cities.

“This may reflect affordability constraints, but there could also be higher levels of rental supply as investor activity in the market increases,” Owen said.

Rent changes in capital cities

Despite the strong national and regional figures combined, a closer look at the evolution of rental value by capital reveals very different stories.

The evolution of rents during the year varied considerably, ranging from a growth of 21.8% in Darwin to a decrease of 1.4% in Melbourne.

Canberra remains the most expensive city to rent, with Adelaide the most affordable.

Owen said that despite increases across the country, rental prices probably can’t go until they peak.

“Overall, I think we can expect a similar outcome for the Australian rental market and the purchase market. Very strong rental growth is not sustainable while income growth remains moderate, ”she said.

The result will likely be more moderate growth rates over the next few quarters, especially as investor participation is on the rise, offering more rental supply. “

Australians struggle in new lockdown

The data is released as the country battles the spread of the COVID-19 Delta variant, which has resulted in the shutdown of many businesses and the loss of paid work by workers.

The government has announced one to those affected, but some say it is not enough.

Unions have warned that confused messages have left workers vulnerable with impossible choices and called on authorities to draw a line.

In addition, credit rating agency Fitch said low interest rates in Australia had also started, which could potentially penalize first-time home buyers.

“Government programs, such as support for FTB in Australia, have also spurred purchases,” he said.

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