Did you spend your day yesterday queuing up to look at rental properties? My social media has been absolutely flooded with videos of young people standing shoulder to shoulder in hours-long lines waiting to see one or two bedders across the country.

In that context, you’d be forgiven for thinking that the rental market is the worst it’s ever been. However, I’m here today to walk you through what the data tells us, which is a different story. In this newsletter, I’ll unpack what the numbers actually tell us about the state of Australia’s rental market and what it means for young Aussies.

Just a quick one before we jump into it: Today's newsletter is sponsored by Domain, but they've not provided any input on the content I've written here.

Despite the long, twisting lines, the data tells us that rental prices haven’t actually worsened. In fact, a new report from Domain finds that the rental market has entered a “new phase” where we’re experiencing a “rare moment of stability”. 

So, what does that actually mean?  Well, it means that while we’ve had a sustained period of rental price increases, we’re now seeing a stabilisation of those prices (rather than a further jump). 

I know it can be a little bit abstract to talk about things like “increases” and “stabilisation” when we are talking about rent, so let’s dive into the numbers.

The median asking price across all age groups for a rental apartment in capital cities is:

Some cities, like Melbourne, Adelaide and Canberra saw no change from the previous quarter to this quarter, while cities like Perth and Hobart actually saw prices go backwards during the same period. 

The same picture of stability is being drawn when we look at rental prices for houses. Prices haven’t increased quarter on quarter in Sydney, Melbourne, Adelaide, Perth or Canberra - so instead of those historically huge increases, we’re seeing way more steadiness.

Now, if you’re reading this and thinking to yourself that this all sounds great but you still can’t afford a rental, you’re not alone. 

It’s impossible to talk about these numbers without acknowledging that the point at which those prices are stabilising at is still really high. Just look at that list above, we’re talking about prices as high as $750 in Sydney. 

So while we are seeing a plateau in those prices, it doesn’t mean that they’re at a price that is affordable for a lot of Australians. A recent report from Anglicare Australia found that essential workers are being priced out of the rental market nationwide, with nurses, tradies, and hospitality workers now “locked out of most rentals.” Less than 2% of available rental listings analysed were affordable for an aged care worker, a nurse, or an early childhood educator.

While I don’t hold a crystal ball and can’t tell you what the future holds, I can look to people much smarter than me for some inspiration. 

On where the market is going, Domain’s Chief of Research and Economics, Dr Nicola Powell, makes the point that it’s possible that we could see an easing off of rental demand as more people transition into home ownership. Powell highlights that now that the Government has made it possible for first home buyers to buy a home with a 5% deposit (which you can learn more about here), it is likely that more people will break into the housing market, and that could ease rent demand over time. 

The state of play we’ve laid out til now is that rental prices are stabilising, but that they remain high. There are some signs this trend could continue, based on expectations about how government policy might interact with the market.

In the meantime though, young Aussies are turning to some innovative ways to make more affordable decisions. Two trends come to mind:

1. Taking a financial gap year. We’re seeing popular creators online talking about their experiences leaving the capital cities in search of an economic “break” in rural or regional Australia. Some people, like former digital marketing exec Tim Abbott, are seeing their cost of living expenses decrease by 75-80% as a result.

2. Moving in with friends. Another trend we’re seeing play out is couples moving into sharehomes with other couples or friends in an attempt to lower the overall cost of living. It’s certainly not a new concept, but is increasing in popularity as young Aussies seek out new ways to remain in the locations they love.

We’ll be sure to keep an eye on where the market is heading and the trends that are emerging, especially for young Aussies. I’d love to hear from you: how’s your experience been cracking Australia’s rental market? Hit reply to this email!

You know the stats. Renting has never been harder.

Prices are high, competition is fierce, and finding somewhere decent feels impossible. That’s where Domain comes in.

Whether you’re hunting your first place, thinking about moving suburbs, or just trying to make sense of the market, Domain has your back. From up-to-date listings, greater price transparency, and expert advice, Domain gives you the info you need to make smarter decisions.