As Australia’s housing market continues to boom, thousands of Australian renters are also feeling the crunch as rental prices in many cities are reaching record-breaking heights.
According to findings from the newest Domain Rent Report, median rental prices in Sydney, Canberra, Brisbane, Adelaide, and Hobart, are at an all-time peak.
Outside of the record-setting numbers, Perth and Darwin are also significantly higher, with rental prices reach the highest they’ve been in six years, and Melbourne is just $10 away from surpassing its previous record.
The capital with the highest current median weekly rent of $630 is Canberra, where the yearly change in rental home costs is at a 14-year high of 10.5%.
Darwin is just behind with a median rent price of $593, and it also has the second-highest year-to-year rate of change at 20.9%.
Sitting at third is Sydney, with a median rent of $550 and the second-lowest yearly % increase at only 1.9% for home rentals.
Just below Sydney is Hobart, with a current median weekly cost of $495 and a yearly increase of 10% for home renters.
Both Brisbane and Perth share a median weekly rent of $450, with 12.5% and 21.6% year-to-year increases.
The capital with the lowest current median rent is Melbourne, the only city with a 0% yearly increase with $430 remaining the average weekly rental price.
Unlock your suburb's demographic profile
Looking to buy in Ultimo, NSW 2007.
This information is a guide only and is an estimate only based on the past 12 months of aggregated online mortgage enquiries from eChoice and partner programs.
Speak to a home loan specialist today
Submitting your enquiry
An eChoice home loan expert will be in touch soon.
Domain’s chief of research and economics, Nicola Powell, believes that the boom in rental prices is taking a toll on those aiming to buy property in the future by making it more challenging to save for deposits.
“These conditions really haven’t been seen in well over a decade. It’s pretty unusual that we’ve got all cities, bar Sydney and Melbourne, rising at a rapid pace,” Dr Powell explained.
“We always talk about increasing prices being the barrier to affordable homeownership, but rising rents hinders that even further because household budgets and the savings pot suffer the most. I think it’s very challenging. First-home buyer numbers are reducing – it means they will be tenants for longer.”
One in Three Properties Now Cheaper to Buy Than Rent
While it may not seem like it if you live in a capital city, new data from CoreLogic indicates that 36% of current housing stock available for sale is cheaper to buy than rent.
For those who can save up a deposit, near record-low interest rates are still available for mortgages across the country, so servicing a mortgage can save you more money than renting in many places, particularly in regional areas.
Eliza Owen, head of research at CoreLogic, also believes that record-low interest rates have impacted the market to make it cheaper to buy than rent in some areas of the country.
“The increase in areas where it is cheaper to service a mortgage than to pay rent across Australia when compared with pre-COVID analysis is a reflection of much lower interest rate costs on mortgage debt since the onset of COVID-19,” she said.
“If it makes more sense to pay for a mortgage than rent, renting households may have been triggered to look for something to buy as interest rates have fallen.”
Whether a house is cheaper to buy or rent largely depends on location, with some of the best deals for buyers today can be found in regional Queensland.
Eight out of 10 homes in Townsville, Cairns, and Toowoomba are cheaper to buy than rent, making “The Sunshine State” an extremely popular destination for buying instead of renting.
The most significant disparity between rental and buyer costs can be found in the Northern Territory, where the price gap in Darwin homes is $158 per week.
Buying Your First Home?
Download our 15+ page guide today!
For both Western Australia and Queensland, you can save $114 per week on average by buying compared to renting a home.
The city with the smallest difference between rental and mortgage prices is Hobart, where the difference is only 90 cents per week.
While rental prices in Sydney and Melbourne are still high, it’s still more affordable to rent than buy in these two markets.
On average, Sydney renters can expect to save around $232 per week renting instead of buying, while Melbourne renters will save $172 compared to the average mortgage repayment.
Although renting is in most cases more expensive than ever, Owen believes that there most likely will be a peak met in the near future.
“Overall, I think we can expect a similar outcome for the Australian rental market as the purchasing market. Very high rental growth is unsustainable while income growth remains subdued,” she said.
The result will likely be more subdued growth rates in the coming quarters, especially as investor participation trends higher, delivering more rental supply.”
Words by Rimas Veselis
You don’t need to leave your house to get an eChoice home loan consultation – As always we will discuss your options over the phone – we’re here to make your home loan journey easier.