A new analysis from CoreLogic reveals a surprising trend in the Australian rental market: renters are increasingly opting for larger homes. This shift is likely driven by the rising cost of living, which is making it difficult for renters to afford smaller dwellings.
The CoreLogic analysis found that rent for houses with five or more bedrooms has grown by a significant 8.7% in the past year, compared to a slowdown in rent growth for smaller dwellings. For example, annual growth in one-bedroom units and studios has decreased from 16.8% to 7.1%.
This trend suggests that renters are forming shared houses or multi-generational households to cope with rising costs. The average rent per bedroom becomes cheaper the more bedrooms a dwelling has.
“Rental Affordability Continues to Deteriorate in Australia,” said the experts from CoreLogic. The national median weekly rent value reached a record high of $634 per week in June, up $48 from a year ago.
More significant rental properties are showing more resilient rent growth, potentially because they are more feasible for renters in shared households or multi-generational households. However, this trend has regional variations.
New South Wales and Queensland are leading the way in terms of higher rent growth in larger houses, with Melbourne also showing significant growth. In contrast, cities like Perth and Adelaide are seeing lower rent growth for larger houses, which could lead to a demand shift towards these properties.
You can read the full CoreLogic report here for a detailed analysis, including additional commentary and graphs on the percentage change in rent values by bedroom count across houses and units.
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