Pittwater Life October 2023 Issue

Rent growth ‘will slow’
Slowing rent rates could be
a key trend in the housing
market for 2024 due to rent
prices flattening out – albeit
at high levels, according to a
recent CoreLogic report.
The three reasons that
CoreLogic expects to see
a slowdown in the pace of
rent increases are:
1. Potentially lower rates
Annual growth in rent
values and interest rates
move together over time,
the report explains. Since
it is forecast there will be a
decline in the cash rate in
2024, economists are also
predicting this will flow
on to the overall housing
sector.
“A reduction in interest
rates could increase
demand from housing
investors, and increased
investment purchases add
to rental supply, which
may serve to lower rent
growth,” CoreLogic’s head
of residential research Eliza
Owen explained.
2. A change in preferences
Another potential reason
for rents to fall is softer
income growth. During the
pandemic, household income
growth shifted much higher,
which allowed occupants
to lease more-spacious
properties, or move out of
share-house agreements.
“People could afford
leases on more-spacious
properties, which has
contributed to lower stock
levels as households spread
out across the dwelling
market,” Owen says.
If income growth
continues to slow in the
next year, renters may look
to re-form share houses.
3. Stretched affordability
If rents continue trending
upwards, Australians will
be further locked out of the
rental market. According
to CoreLogic’s data, rents
have increased 29.3% since
August 2020, which is the
equivalent of around $134 a
week in 2023. – LO
Hot Property
The Local Voice Since 1991
OCTOBER 2023 51