CoreLogic’s national median rent value ticked up to $601 per week last month, equating to a median annual rent of $31,252 a year.

CoreLogic median rent is based on a current estimate of rent income, describing what the median dwelling in Australia would rent for if you put it on the market at any given time. The $601 median is a series high and coincides with total annual rent increases of 8.3% nationally.

The median has increased markedly from $437 per week in August 2020, pushing annual rent values up by more than $8,000 in that time.

How did we get here?

Recent growth in rent values, which averaged 9.1% a year for the past three calendar years, stands in stark contrast to the average annual growth rate of 2.0% in the 2010s. Since the onset of the pandemic, several factors have contributed to unusually large rent rises, including:

 A notable decline in the average household size from late 2020, partly driven by a reduction in share housing meaning more dwellings were needed even when population growth was close to zero in 2021.

 A rapid increase in the Australian population from late 2022 as international border restrictions were lifted.

 A temporary shock to investment housing activity between May 2022 and February 2023 as interest rates rose. Investor activity has picked up markedly since, but there is still a lot of catch-up required in establishing new rentals.

Longer-term factors have also increased demand for rentals.

The reduction in social housing supply as a portion of all dwellings over the decades has placed more pressure on the private rental market, as has a declining rate of home ownership. Average household size has also been gradually declining over decades due to economic and demographic factors (for example, more people living alone), requiring more dwellings to house a given population.

Rent value increases have broadly outpaced wage and income rises at the national level, meaning rental affordability has also deteriorated. The portion of gross median household income required to service median rent rose from 26.7% of income in March 2020 to 31.0% in September last year. While a far higher portion of median income is required to service the new mortgage, renters tend to be on a lower income. The latest data from the ABS suggests median gross household income was 41.8% lower across renting households than owner-occupiers with a mortgage.

Median rents across the capital city markets ranged from $745 per week in Sydney, to $535 per week in Hobart. Canberra and Hobart were the only markets to see a decline in rent values through 2023, at -1.9% and -3.5% respectively.

Figure 3 summarises the state of rental markets across SA4 regions of Australia. Of the 88 dwelling markets analysed, only 16 were down from historic highs. This ranged from the New England and North West market of regional NSW, which has fallen marginally from a peak in the previous month to the Outback North of WA, where values are still 25.6% below the peak achieved amid the 2010s resources boom. Despite being well below its historic peak, the Outback North of WA had a relatively strong uplift in rent values over the past year, at 11.1%. Across the SA4 rental markets, the highest median weekly rent was in Sydney’s Northern Beaches ($1,167 per week), followed by the Eastern Suburbs ($1,046). The lowest median weekly rent across the capital city SA4 markets was the Melbourne – West market.