The share of rental properties listed for under $400 a week has more than halved to 15% across most Australian capital cities over the past year, accounting for just 7.8% of Sydney listings in February.
Research from data provider PropTrack, based on analysis of realestate.com.au found renters seeking a standalone house faced an even tighter market, with less than 5% of Sydney homes listed at under $400 a week.
Across all dwellings since February 2022, the proportion of rentals listed below $400 a week fell from 43.5% to 20% in Melbourne; from 28.3% to 13% in Brisbane; and from 6% to 1.9% in the ACT.
The PropTrack research also revealed big challenges for renters in regional areas where just a quarter of properties were listed for under $400 a week last month – down from 39% at the same time last year.
Report author and the director of economic research at PropTrack, Cameron Kusher, said the market is expected to continue to tighten with steady demand and a likely rate rise when the Reserve Bank meets later today.
“If there was enough supply, landlords wouldn’t have the ability to put up rents just because interest rates have increased, but it really reflects the fact that there’s not enough supply,” he said.
“Landlords are going to recoup these additional costs that they’re incurring as interest rates go up. They know that the rental market is very tight and there’s a lot of competition.”
He predicted it would “get worse in the capital cities before it gets better” as migrants, including university students, return in greater numbers and people who moved regionally during the pandemic are forced back into city offices.
“For people on low incomes, their choices are getting significantly reduced and it’s probably going to push people back into share houses, into units, into smaller accommodation than they want or need,” Kusher said.
“It highlights the dire need for more rental stock Asap.”
The figures could be hiding an even more bleak reality given they reflect only the advertised listing prices – but not what price the properties were actually leased at.
Kusher said that while the solicitation of rent bidding was banned in most jurisdictions, the “desperation” of renters meant offers were often made.
“People know that if they want to secure properties, the offer they put in has to be, in some circumstances, higher than the advertised price and that’s the only way they’re going to get it,” he said.
Last week Guardian Australia reported that the New South Wales government was yet to issue any fines to real estate agents caught promoting the practice since it was banned in December.
Fair Trading had received six complaints about agents soliciting higher rent offers but said it had taken an “educative approach”, issuing 300 warnings to agents.
