Australia’s home-rental inflation is accelerating, with prices agreed between tenants and landlords typically higher than the advertised rate, a joint research paper from the Reserve Bank and the Australian Bureau of Statistics showed.
(Bloomberg) — Australia’s home-rental inflation is accelerating, with prices agreed between tenants and landlords typically higher than the advertised rate, a joint research paper from the Reserve Bank and the Australian Bureau of Statistics showed.
Since 2020, rents paid by new tenants have surged by 24%, exceeding the 22% gain recorded in an index compiled by property consultancy CoreLogic Inc., the RBA’s Fred Hanmer and ABS’s Michelle Marquardt said in the paper Friday. The data reinforce a picture of strong housing demand and limited property listings.
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“The rental market has tightened considerably,” the duo said. “Rent inflation has picked up and is broadly based across new and existing tenants, property types and the states. Rent increases have also become more common, and larger on average.”
The study was presented at a joint ABS-RBA conference in May, the same month Governor Philip Lowe delivered a surprise interest-rate increase. The RBA followed that up with a further hike in June to take the cash rate to 4.1%.
The paper was written while lead author Hammer, who works at the RBA’s Economic Analysis Department, was on secondment at the ABS. Marquardt is the prices program manager at the statistics bureau.
Rising rents are an increasing concern for the RBA as a housing shortage is exacerbated by a post-pandemic surge in immigration. The central bank has raised rates 12 times for a total of 4 percentage points of increases to try to control inflation and Lowe has warned that further hikes may be needed.
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