Aussie renters feeling the effect of rising interest rates

skyline where rent prices increase

Renters across Australia have seen everything increase in cost, including their rent.

According to CoreLogic, rental prices have risen by 9.8% in the last12 months, with the majority coming from capital cities. 

The current problem renters in Australia face is a lack of available vacancies, says CoreLogic’s research director Tim Lawless.

“The number of rental listings available nationally has dropped by a third compared to the five-year average, with no signs of a lift in rental supply. On top of already tight rental supply, it’s likely demand will continue to increase as overseas arrival numbers climb,” he says.

Currently, renters live in a ‘landlord’s market’ due to the low supply of vacant rental listings. The June 2022 Domain Rental Vacancy Rate Report says that vacancy rates have decreased nationwide in the last year, with Melbourne and Sydney feeling the brunt of rental vacancies. This means there’s a high demand for rental properties, but the supply can’t meet it. 

Hence, the increases in rent prices nationwide.

Another Domain report says the current rental median price is $515. Last year, the median rental price was $460–a $55 increase! It’s the fastest price jump since 2014, according to recent Australian Bureau of Statistics data. 

The increases could be partially blamed on the latest RBA cash rate increases, where many investors might have passed the extra cost of having a home loan on to their tenants. Another factor to consider is the growing cost of living, where almost everything is becoming more expensive. There have been few exceptions. 

University of Sydney associate professor from the school of economics, Stella Haungfu attributes higher borrowing costs and tightened lending conditions to the diminishing rental market. 

“It’s harder and harder for would-be-first-home buyers to obtain a housing loan. As a result, they will jump back in the rental queue rather than buying a property. This effect will further increase the demand pressure in the rental market,” she says.

How to deal with higher rent

If you’re not financially ready to enter the property market, it is essential to know your tenant rights. 

For starters, your landlord can’t suddenly change your rent during your lease. 

States require landlords to give several days notice on potential rent increases. If you find a hike excessive, you may even try to dispute it. 

If you’re in a situation where your landlord wants to increase your rent, consider negotiating the price. You can haggle with the promise of signing a longer term lease in exchange for a lower rent. 

Remember that landlords want to make money, and having a place empty will be a loss. It’s in their best interest to have a tenant at all times. Use that to your advantage.

How to become a homeowner

With rent prices predicted to continue rising, it might be time to find a forever home. To get started on your home buying journey, read Mozo’s home loan guides and tips

Alternatively, start comparing home loans below to see what you can afford.

Home loan comparisons on Mozo - last updated 29 May 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    6.25% p.a.
    fixed 3 years
    6.20% p.a.

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

  • Discount Variable Home Loan

    Owner Occupier, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a. variable
    6.01% p.a.

    A low rate home loan for owner-occupiers packed with great features including unlimited extra repayments, free online redraw, no application or monthly admin fees. Rate will vary depending on LVR. Winner of a Mozo Experts Choice 2024 Low Cost Home Loan Award^

  • Discounted Home Value Loan

    Owner Occupier, Principal & Interest, LVR 70-80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.09% p.a. variable
    6.09% p.a.

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).

  • Fixed Rate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.54% p.a.
    fixed 2 years
    7.10% p.a.

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.


* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.