Rental demand has soared across the country as a limited number of homes for rent fuels highly competitive conditions for tenants seeking a roof over their heads.
But new PropTrack data has revealed the most sought-after suburbs for serious renters and, unsurprisingly, demand is high across the board.
A ‘highly-engaged’ or ‘serious’ renter is someone who is likely close to applying for a property, based on their activity on realestate.com.au. This includes returning to a listing multiple times, looking at floorplans, emailing or calling the agent, scheduling an appointment, and a raft of other high-intent behavior.
PropTrack economist Anne Flaherty said one of the main reasons demand is on the rise is due to population growth, which is resulting in a highly competitive market.
“Just under a third (31%) of households in Australia are renters, a proportion that has been steadily increasing for decades as homeownership rates fall,” Ms Flaherty said.
“Not only is the proportion of households renting rising, but so is our population. Over the next 10 years, the country is predicted to add an extra 3.5 million residents, according to the Center for Population’s latest forecasts.
“While the pandemic temporarily halted population growth, this year we have seen the return of international students and migrants.”
PropTrack data shows some suburbs had upwards of 2000% more highly-engaged renters than was typical across their greater capital city or rest-of-state area, demonstrating how competitive the market is in certain pockets.
Greater Melbourne and Greater Brisbane proved to be the most in-demand among renters, with a median of 5129 potential renters per listing for houses and 5084 for units in Melbourne, and 5310 for houses and 5016 for units in Brisbane.
“Typically, international students and migrants are most likely to rent, and often favor CBDs,” Ms Flaherty said.
“Comparing the first 10 weeks of this year with last, the Melbourne CBD saw the largest growth in the number of rent searches compared to any other capital city.”
Renters flock to inner-city suburbs
Suburbs close to the bustling major cities are proving to be particularly popular among renters, with tenants expressing their frustration at needing to apply for multiple properties and still not succeeding.
As demand grows and the available stock of rental properties dwindles, there’s little relief in sight.
In Victoria, Richmond was the most in-demand suburb for houses in Greater Melbourne. It had 367% more highly engaged renters compared to the median. It also featured as the sixth most in-demand suburb for units with 756% more highly engaged renters.
Sophie McGuinness is the business development manager at Jellis Craig Stonnington and represents rentals within Melbourne’s inner-city market, including Richmond.
Rental demand for the city area is higher than ever, Ms McGuinness said, as tenants rediscover their love for urban areas post-Covid.
“A large percentage of renters left the inner-city market when the pandemic hit for a few reasons – the main one being that office workers were working from home full-time and didn’t have the need to live within a 10km radius of the CBD,” she said.
“Now, renters are returning due to most businesses expecting their employees to be back in the office full-time or under a hybrid model.
“Tenants also want to be close to bars, cafes, and restaurants as well as other entertainment precincts like Melbourne Cricket Ground and Sidney Myer Music Bowl. The city is once again thriving.”
Lifestyle locations still have a place
Queensland attracted many renters throughout Covid as tenants escaped southern cities and made the most of remote working.
Census data showed that the Sunshine State had the largest positive population change of any Australian state or territory in 2021, welcoming more than 73,000 people.
Local renters are now not only competing with the influx of interstate migrants, but foreign students who are returning to campuses.
The Gold Coast is a popular destination for international students with the offer of sea, sun, sand and study, but with low stock and high demand, data shows that several suburbs across the region are near impossible to break into.
Houses in Pimpama were the most sought-after in Queensland, with 948% more highly engaged renters than typical across the rest of Queensland, with the suburb having 25,313 serious renters in total.
Living the dream at Surfers Paradise is also in hot demand with 1422% more highly-engaged renters for units than across the rest of Queensland. Surfers Paradise has 34,808 serious renters for units.
Southport was a close second with 1251% more serious renters for units compared to the median for regional Queensland.
Elliott Wicks is the director at Castle Property Agents and said the Gold Coast offers an attractive lifestyle to renters, especially post-lockdown.
“We have noticed that since Covid travel restrictions have lifted, more potential tenants are flocking to the coast for the lifestyle,” Mr Wicks said.
“I think that since lockdown, people are wanting to experience the social scene again – nightlife, entertainment, restaurants and so on. This definitely puts Surfers Paradise on the map as a sought-after location, causing quite a competitive atmosphere when it comes to applications.
“Usually entering the warmer months, we do notice an increase in applications, so this paired with the relaxed Covid restrictions attracts numerous groups of tenants, all wanting similar things from the exact same location.”
Tenants favoring units
As rental prices increase due to the crunch, many tenants are compromising on space and opting for apartments.
PropTrack data reveals that the number of highly engaged renters per apartment listing at a national level has jumped 36.9% year-on-year.
“In the past year, median rent prices have risen by more for houses than for units across Australia’s capital cities,” Ms Flaherty said. “This has increased the relative unaffordability of houses compared to units.”
In Melbourne CBD, there were 2233% more highly engaged renters for units than is typical. The CBD has 118,637 serious renters in total.
In NSW, the strongest demand for units was in Wollongong with 1031% more highly engaged renters than is typical across the state’s regions. Wollongong has 16,782 serious renters in total.
Helping to drive strong demand for units in Surfers Paradise, Mr Wicks said a lot of families are downsizing into modern spacious apartments.
“With inflation and the increase in the cost of living, I am finding many families are looking at downsizing, making apartment living the perfect option,” he said.
“The apartments being built are not the same stock-standard ones as they used to be. Quite often, the apartments are so spacious that it feels like you are in a standalone property, only the view cannot be compared.
“This is making the switch for families that little bit easier, now that buildings are catering for children and becoming more accepting of our furry friends.”