The cost of renting real estate in parts of Australia has climbed nearly three times as much as capital markets in the past year, with the revival of domestic tourism potentially helping to push prices up, according to new data.
The latest CoreLogic report found that rent estimates for all regional properties jumped 9.6% in the 12 months leading up to April, compared to 3.3% in capital cities.
Eliza Owen, of the group, called the price growth remarkable and the tightening of regional rental markets “extraordinary”, with listings in the 25 regions analyzed by CoreLogic falling by half on average over the period.
The average time spent by a rental property in the market in these areas fell from 25 days in the three months in April to 17 days in April.
The strongest regional markets included the Richmond-Tweed area of New South Wales, where the median year-over-year median weekly asking rent rose 17.6% to $ 590, and central Queensland and the Sunshine Coast, where the jump was 15.3 percent to $ 340 and 15 percent to $ 550, respectively.
The highest asking rents were in the Southern Highlands and Shoalhaven areas of New South Wales at $ 620, up 13.2%.
“The data suggests that tenants have to compete harder for rental housing in major regional centers, both in terms of their portfolio and the pace of their decision-making,” Ms. Owen said.
“The more serious consequences of the recent tightening in rental markets include housing stress and homelessness.”
Ms Owen said the ‘sea and tree change’ exodus of people fleeing cities during the September and December quarters was potentially skewed towards high-income workers as remote working tended to be concentrated in the “knowledge economy” which would put additional upward pressure. on real estate sales and rental prices.
But across the 2020 calendar as a whole, there was actually less migration to regional Australia from cities (233,122 people) than the year before (233,779 people).
Ms Owen hypothesized that a trend that may have recently squeezed the regional rental market was the conversion of short-term rental housing that, anecdotally, had been turned into long-term rentals at the start of the pandemic when the travel and tourism abruptly ceased.
“With the easing of restrictions on domestic travel, these properties have likely been converted back into the short-term rental market,” she said.
The data also showed that the combined selling prices of regional homes rose 13 percent in the 12 months ending in April, beating increases of 6.4 percent in capital cities.