Domain's latest Rent Report, released on Thursday, revealed that the median rent growth for both houses and units across the combined capitals flatlined at 0% in Q3.
The median asking price for houses has stalled at $650 per week, while it has remained $630 for units - the same as in the previous quarter, when the declining growth rate was first noted.
This marks the the lowest September quarter growth rate since 2019 for detached dwellings and 2020 for units.
"After enduring the steepest and longest rental surge in history, our latest Domain Rent Report shows that all capital cities have passed their peak in growth rates and are now decelerating rapidly, with some cities already in decline," said Dr Nicola Powell, Domain chief of research and economics.
"This has slowed annual gains to an almost three-year low across the combined capitals, with most cities at multi-year lows."
The annual growth rate of median rent for houses is 5.8%, and 8.9% for units.
Domain's latest findings about the easing rental market come on the heels of the lowest increase in national home values recorded in the same period, suggesting that Australia's property market may have reached a critical juncture.
"This is a long-awaited good news for renters, 38% of which are renting to save for a property," Dr Powell said.
This could potentially ease rent stress faced by nearly a third (31.7%) of renters across the country, as found the InfoChoice State of Aussies' Savings Survey.
A person is considered under rental stress if they are paying more than 30% of their gross income on rent.
How much are the rental prices for houses?
Big cities saw annual rent rises for houses hit multi-year lows in the three months to September.
Sydney recorded its weakest growth rate for a September quarter in four years (up 2%) while Melbourne rents marked the weakest outcome for the same period since 2021 (0%).
Meanwhile, tenants in Brisbane saw their weekly rents in Q3 drop by $5 (down 0.8%) from the previous quarter when rents hit a record high.
Canberra's asking rent for houses also fell by $5 (down 0.7%) from its median price in the previous quarter. Its rent is now $10 lower than the record last seen in December 2022.
Similar to the capital cities, the median asking rent in the combined regionals also remained unchanged in the September quarter, currently sitting at $550 per week.
How much are the rental prices for units?
Unit rents in Brisbane and Canberra both tumbled over the September quarter.
The median asking rent in Brisbane is currently $10 cheaper (down 1.7%) than its June 2024 record, while Canberra tenants are now paying $10 less (down 1.8%) than the quarter prior and $20 less than the March 2024 record.
Sydney rents remained steady for the first time this calendar year, following its weakest September quarter outcome in four years.
In Melbourne, rents have stalled for the second consecutive quarter, marking a significant turnaround after a record run of rent gains.
Balancing supply and demand eases rent rises
According to Domain, the number of prospective tenants per listing on its platform has fallen to its lowest level since 2019, indicating that rental demand is easing.
"About 39% of those looking for a rental choose to rent rather than buy, as it lets them live in a better home or area than they could buy," Dr Powell noted.
Renewed investor activity - marked by 35% increase in the value of investment home loans annually, per the latest ABS lending indicators data - is also expected to bolster housing supply.
"Investors are likely reacting to capital growth potential and seeking to purchase before the RBA lowers the cash rate, which will likely spark housing activity," the research director noted.
However, this is yet to materialise as national vacancy rate has remained at a tight 0.9% in the September quarter - well below the healthy range of 2-3%.
Photo by Ján Jakub Naništa on Unsplash
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