2022 Australian Rental Property Trends
In recent years, Australia has been a haven for rental property investors benefiting from high rental yields and growing demand. As specialists in property rental management software, Managed App has the latest details on the national rental industry. Check out our guide to the major trends impacting Australian property rentals in 2022.
In February 2022, 9Newsreported Australia’s six-figure rise in property prices in the previous year was the fastest increase since 1989. Although COVID remained a significant economic factor for much of the year, 2021 saw a meteoric rise in median property values nationwide, however, 2022 has been a different story, as the booming market softened slightly on the heels of rapid interest rate increases.
Bloomberg described the current conditions as “Australia’s slumping property market” and noted the risk of a recession. House prices nationwide have dropped 2% across June, July, and August 2022, while Sydney leads the capital cities with a drop of nearly 5%. First-time homebuyers and investors are certainly being more cautious, with buyer demand declining and auction clearance rates falling, according to ABC News.
Return of International Students
While rising interest rates and falling house prices dominate the discussion of Australian real estate trends, it’s not all bad news. For owners and agencies who struggled to fill vacant rental properties during the pandemic, the return of international students and visitors is making a big difference. More than 37,000 students have returned, with thousands more expected in the months to come.
Overall, around 160,000 permanent migrants are expected to arrive in Australia annually and over 500,000 students total, according to the Australian Parliament’s Permanent Migration Program. These new arrivals need somewhere to live, and a lot of them choose rental accommodation at least to start.
Asa result, Rental vacancies are down, as confirmed in the Sydney Morning Herald: Sydney’s available rentals reached a record low of 1.3% in July 2022, down from 2.4% the previous year. In general, renters are facing more competition, especially in regional areas where only 0.6% of rental properties are sitting empty.
Houses vs. Units
Lastly, another property rental trend to consider is the strong performance of houses compared to units. During the pandemic, many Australians preferred the privacy and space of houses over units, and this trend is set to continue moving forward. Most investors are able to achieve higher rental increases for a house than a unit. A News.com.au report found that some renters are facing increases as high as 30% as COVID-related discounts fade away and the market rebounds sharply, especially in inner-city areas.
In a constantly evolving real estate and rental market, Managed App is here to help agencies, owners, tenants and trades people. Get in touch with our team directly to arrange a demo.