the data behind Australia’s rental crisis

Over the past three and a half years, we have been tracking a range of Australian economic indicators. These cover diverse topics and industries, pulling together data from the real estate, construction, automotive, and retail sectors in our economic paybook. This data helps us stay on top of how these sectors are performing, giving us the tools to identify trends as they emerge. Key here is the ability to collate these different datapoints, providing a deeper understanding of the impact the changing economic environment is having on the Australian economy, and the impact that this might have on different sectors going forward.

One pressing issue that has gained widespread attention over the last few years is Australia’s housing crisis, particularly concerning rental availability and affordability. Drawing on information from the economic playbook, let’s walk through some of the trends we are observing, and how we anticipate these playing out in 2024 and beyond.

rental listings

Since we started tracking data in June 2020, we have closely monitored the supply side of the rental market through weekly snapshots of rental listing availability. Over this period, there has been a notable 21% decrease in rental listing availability nationwide, declining from 70,000 to 55,000 by the end of 2023. Among the states, Victoria stands out as the hardest hit, experiencing a significant 41% decline, whilst New South Wales follows with a 19% decrease, and Western Australia trails closely behind with an 18% drop. This highlights the severity of the rental crisis, and shines light on the core problem, a lack of supply.

sales listings

Along with rental listings, we have also tracked the supply side, by capturing weekly snapshots of sale listings both nationally and by state. Over the same period, there has been a steady 11% rise in sale listings nationally, growing from 126,000 to 140,000. Unlike the rental market, the sales market in Victoria grew significantly, increasing 34%, followed closely by New South Wales at 32%. One market that did follow the rental trend more closely is Western Australia, as the number of sales listing dropped 33% from 21,000 to 14,000, the most significant decline across the country.

The national increase talks to a greater volume of property transactions occurring across the country. While many of these will be owner occupiers, it highlights the uncertainty for tenants dealing with the impact of their residence potentially being sold.

housing supply

Looking ahead to 2024, one-way rental pressure may ease around Australia is by an increase in supply to the housing market. While we can see a slight 1.5% uptick over the last 3 and a half years, rising from 12,400 to 12,600, this isn’t growing to the extent that one would hope. With that said, approvals peaked at 22,000 in March 2021, the second highest month in Australian history (behind November 2017 – 22,900), which does talk to a more positive future state. Although Australians continue to feel under pressure in the rental market, these developments being completed should (at least to some extent) help to alleviate the burden.

conclusion

The data from our economic playbook paints a concerning picture of Australia’s housing crisis. Over the past three and a half years, we have witnessed a significant decrease in rental listing availability nationwide, underscoring the severity of the issue. Despite this, there has been a steady rise in sale listings, which has the potential to further reduce the pool of available options. Looking ahead howevery, there is hope that the slight uptick in national dwelling approvals will help ease rental pressure by addressing the supply-demand imbalance in the housing market.

Also remember that our b2b and consumer tracking research runs monthly. Click here to find out more, and feel free to get in touch if you’ve got questions that you’d like to answer.