Report Shows Rent in Australia Increased After Return of International Students

A report has found that unit rent prices in Australia had been growing more quickly compared to houses, particularly after international students' return to the country.

The Domain Rent Report, published in September 2022, revealed that the house and unit rents in Sydney are both at a high price, with unit rents being at a record level of $550 a week for the first time since 2018. Among the reasons why the demand has increased is international and domestic travel, including the many international students returning to the country, Erudera.com reports.

“Demand pressures have also been sparked by the return of international and domestic travel, overseas migration and foreign students. This has seen unit rents rise faster than houses over the past year; in fact for units they are increasing at the quickest pace on record and for houses the quickest pace since 2009,” the report points out.

Over the September quarter, house rents in Sydney have increased by 4.8 percent, the most drastic increase since 2019, meaning tenants should pay $650 weekly.

Data indicate that Sydney continues to register a low vacancy rate of 1.1 percent and remains a competitive environment for tenants compared to before the COVID-19 pandemic. The situation has worsened by a record low number of properties available for rent, decreasing by 55 percent in a year and halving since 2021.

Here too, demand pressures have been caused by several factors, including the return of skilled migrants and international students and the lack of affordable home ownership.

On the other hand, Melbourne has seen improvements in its rental market which has almost fully recovered from the COVID-19 pandemic. Although house rents in the city have increased by 2.2 percent over the quarter to a new high of $470 a week, Melbourne remains the most affordable capital city to rent houses.

Unit rents in Melbourne have increased by 3.7 percent, to $425 a week, a 14.9 percent increase since 2008, the steepest annual increase from that year.

The report notes that the improvements in Melbourne’s rental market are also supported, among others, by the return of international students to Australia.

“The improvement in the rental market is also supported by the return of international students and overseas migration, the affordability constraints of purchasing, weaker investment activity throughout the pandemic, changing household formation, and some investors selling,” the report reads.

Rents in Perth, which remains the country's second most competitive capital city rental market, have significantly increased during the last two years.