Over the past five years, property investors in Australia have seen significant gains, with the national median rent increasing by 39.7%. However, in July, rent growth slowed to just 0.1%, marking the slowest pace since 2020, according to CoreLogic. While rental prices are still on the rise, the growth rate is beginning to ease across the country.

This slowing trend could influence the housing market, potentially affecting the availability of cheap home loans and affordable housing options for both renters and buyers. As the market adjusts, opportunities may emerge in different regions for those seeking more affordable housing.

At the same time, annual rental growth has been trending down over the past few months. Between February and July, rental growth fell from 9.7% to 8.0% in the combined capitals, although it rose from 5.4% to 7.1% in the combined regions. The big cities appear to be close to their rental affordability limit, while the regions, which have had less rental growth, might have more capacity to absorb higher rents.

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Despite the slowdown of the national rental market, CoreLogic economist Kaitlyn Ezzy said rents were likely to keep increasing.

“Low supply will likely continue to put upward pressure on rents, albeit at a slower pace,” she said.

“With dwelling approvals and commencements at historic lows, providing sufficient new housing will not be a quick fix and remains a genuine challenge for policymakers, the property industry and, of course, tenants.”

In other words, while rents are likely to keep rising, tenants are likely to get some relief and investors shouldn’t budget for the double-digit-percentage increases of previous years.

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