A first of its kind ABS release today revealed 20% of capital city rent stock is priced lower than in March 2020.
There has been a lot of focus recently on rental pressures that tenants across the country are struggling with, mainly driven by vacancy rates and a surge in overseas migration.
However, the ABS have highlighted housing in inner city suburbs (<12.5kms from the city centre), where rates in many cases are still lower than before the pandemic.
Rent in more than a third (36%) of inner city suburbs across the eight capitals are currently lower than early 2020, driven by Sydney (49%) and Melbourne (62%).
It's easy to forget, but throughout the pandemic, rental inflation in Australia's largest cities was negative, with more densely populated areas becoming most affected by lockdowns and restrictions.
Unsurprisingly, areas closest to the city centres were most affected, and while these areas have seen substantial growth in the aftermath of Covid-19, rents have not caught back up in many cases.
Deficit to be short lived?
For some, this might be an encouraging sign that perhaps some of the hysteria around conditions faced by renters has been exaggerated.
Rental inflation though continues to accelerate, and it isn't likely to be long before these suburbs catch up and overtake the pre-Covid benchmarks.
As we return to normal, growth to rents in regional areas is slowing, while capital city inflation continues to swell.
About 15% of the available stock in these inner city areas is already being rented for at least 10% higher rates than pre-pandemic levels.
This number becomes 45% when you take out Sydney and Melbourne, where the most dramatic drop in rental rates occurred.
However, in both Sydney and Melbourne, the percentage of rents at or below pandemic levels is decreasing, as demand for housing in the middle of Australia's largest business districts continues to increase.
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Picture by Denise Jans on Unsplash
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