Based on the new large administrative dataset of rental properties used to measure Rents in the Consumer Price Index (CPI), the article reveals several trends and insights into the private Australian rental market:
- Rent inflation has picked up recently: Since 2021, rents have increased across inner-city and regional areas throughout all the states. Median rents began increasing in all states in 2021 and have continued to increase over the past year.
- Rent increases have become more common and larger on average: particularly for the 2–3 per cent of properties each month that have a change in tenants.
- Rental vacancy rates have declined: The rental market has tightened since late 2021, with vacancy rates declining over this period.
- The COVID-19 pandemic caused a shift in rental demand: During the pandemic, rents fell in many suburbs close to central business districts but increased in regional areas due to a preference shift among many households for more space and net population flows.
- The new dataset provides more detailed information about rental properties: The new dataset is comprised of information about rental properties as entered by property managers. The dataset contains several variables of interest, including weekly rent, property characteristics, such as type (apartment, townhouse or house), street name and postcode, and number of bedrooms, lease start and end dates, and a unique property ID.
- Median rents vary by state: In February 2023, the median weekly rent amount was highest in the ACT at $560 per week and lowest in South Australia at $380 per week.
Overall, the trends suggest that the Australian rental market has tightened and become more expensive, with rent increases becoming more common and larger on average. The insights provided by the new dataset offer a more detailed understanding of the rental market, which is important for policymakers, as it has implications for patterns of consumption and savings by households, as well as inflation.