Signs rental market has peaked as price growth slows

ABC NEWS (Australia)

After a post-pandemic surge the rental boom in prices may be coming to an end. New data shows rents across Australia are increasing at the slowest pace in six years and experts say the slowdown could bode well for those hoping for a rate cut next month.

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00:00Even in one of Australia's most affordable cities, renters are finding it tough to find a home.

00:08So I've been forced to look into cheaper and cheaper, smaller and smaller apartments.

00:13I mean you enter this one and it kind of just finishes.

00:16It's pretty competitive. I think there's quite a lot on offer.

00:19I think it just really makes you question how much you value space.

00:25Rents grew by just 0.4% in the three months to December and 4.8% over last year after surging 8.1% in 2023.

00:36Sydney is still the most expensive place to live, followed by Perth, Canberra and Brisbane,

00:42while Hobart is Australia's most affordable city to rent.

00:46It's the smallest December quarter rent growth since 2018.

00:50In other words, we're getting back to pre-COVID levels of rent increases.

00:55The slowdown is due to lower overseas migration and prices outstripping what tenants can manage.

01:02It's tough for landlords to keep raising the rents when people simply can't afford it.

01:06More people are also moving into share houses.

01:09We surveyed over eight and a half sharers from across Australia.

01:13Almost half of all respondents have turned to share accommodation as a way to make ends meet.

01:19They can no longer afford to live alone.

01:21The slowdown and rent rises will also contribute to lowering inflation

01:25as housing costs make up a major portion of the goods and services the Reserve Bank looks at when it's making decisions about interest rates.

01:34And that's good news for Australians because it might influence the RBA to move on rates sooner than later.

01:40A rate cut will also lower mortgage repayments for landlords who then might hold off hiking rents in the near future.

01:49For more UN videos visit www.un.org

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