Record rental prices have spurred those with the means to jump on the property ladder, new data shows.
First home buyer loans increased by 6.2% over the year to May 2024, according to the latest PropTrack rental report.
But record low vacancy rates mean the national average of $600 a week – an increase of 9.1% since June 2023 – is likely to remain high for the foreseeable future.
PropTrack’s director of economic research Cameron Kusher suggested the trend to buy will increase but only for a fortunate few.
He said: “In response to higher rents, people will look to reduce the size of their rental properties, move to a less desirable location in which rents are cheaper or share their rental properties with others to reduce the cost.
“The heightened cost of renting is likely to encourage more renters, who have the means, to exit the rental market and purchase their own property.
“While owning a home generally costs more than renting, it offers greater cost certainty and security.
“However, a large cohort of renters are unable to leave the rental market and purchase their own home.”
The new report also pointed to a modest slowdown in the rate of rental growth, driven by a crackdown on international students.
But with the total volume of advertised rental properties 4.4% lower than last year, his view is that the best way to ease the crisis to build more homes.
“While it (the slowdown) is encouraging for people trying to rent it is still extremely tough,” he said.
“We’ve got low vacancy rates, low supply of listings, and strong demand for rental accommodation, so it’s still tricky for people looking for rentals.”
