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Median advertised rents across all dwellings nationally rose 2.0% in the June quarter to $520 a week according to the latest report from Proptrack.
That brings rents up 11.8% compared with the 2022 June quarter when the median national rent was $465.
But rents across the combined capital cities have seen the sharpest increase, up 5.8% in the June quarter to $550 a week. That brings rents up a "staggering" 17% compared to a year earlier.
Units in Sydney and Melbourne are responsible for much of that growth, up 19% and 17.5% respectively over the past year.
Median unit rents are now 19% higher than before the pandemic in Sydney and 10.6% higher in Melbourne.
PropTrack economist Angus Moore said a supply and demand imbalance is to blame.
"Rental markets continue to be extremely challenging for renters, with rents surging across much of the country amid strong demand and very limited availability," he said.
"This is especially true in Sydney and Melbourne, where weekly rents have increased significantly after falling in these cities during 2020 and 2021.
“There are signs rent growth may be slowing in some of the other capitals. Rents in Adelaide were flat in the June quarter. Rents in Brisbane grew 1.9%; while still quick, it was the slowest pace of quarterly growth since mid-2021."
Melbourne rents rising faster than any other capital city
Across all dwelling types, Melbourne rents are rising faster than any other capital city with 4.3% growth recorded in the June quarter.
According to PropTrack, it now costs $470 to rent an average unit after a 4.4% lift in the June quarter. Compare this to a year ago when it cost $400 to lease a unit in the city.
It doesn't look likely to get better any time soon, with the state's peak real estate body warning that landlords are preparing to exit the market as a result of rental reforms.
Real Estate Institute of Victoria (REIV) CEO Quentin Kilian said a recent member survey found 90% of real estate agents in the state have seen a surge in enquiries from landlords looking to recover costs from the Victorian Government's new land tax measures.
The survey also found seven in 10 real estate agents are reporting an increase in contact from landlords looking to sell their properties.
"Larger land taxes are a disincentive for investors which will ultimately drive rental prices upwards as supply fails to catch up to demand," Mr Kilian said.
"Renters already doing it tough – are also set to suffer under this new levy."
Read more: Rate rises and rental reforms see investors flee
Rents flat in regional areas
In direct contrast, it appears rents in regional areas are moderating.
Regional median rents across all dwellings were flat across the June quarter recording 0% change.
Compared to the year before, regional rents are 6.7% higher but this is the slowest pace of annual growth since early 2021.
“The good news for regional renters is rent growth looks to be moderating after three years of brisk growth," Mr Moore said.
"Median rents were flat in the June quarter, with rents for units even declining modestly. That slowing in rent growth is consistent with improving rental availability in regional markets.
“Rents are likely to continue growing in capitals over the coming months. But, with rental vacancy rates looking to have stabilised, and growth easing in some capitals, national rent growth may start to slow."
Image by john elfes on Unsplash
