Rental price tips: keeping your rent more affordable in a landlord’s market

Rents have hiked significantly in the last year, making the current rental market ideal for landlords. For the almost-third (30%) of Australians renting their home, according to the latest Census data, let’s explore the options available to make rent more accessible and affordable in 2022.

Renters in crisis: it’s a landlord’s market

The latest Domain Quarterly Rent Report shows that the median asking rent for houses across the combined capitals climbed 12% in the 12 months to June 2022. The sharpest house rental price increase was recorded in Brisbane at 16.9% higher over the same period.

It’s a similar story for units, with rent prices climbing 12.2% across combined capitals in the 12 months to June 2022. The median unit weekly rent in Sydney is currently $525, just under $100 less than the median rent for houses ($620).

When you consider that the latest Australian Bureau of Statistics data at November 2021 shows the median full-time adult average weekly total earnings are $1,812.70, this means Sydneysiders are spending roughly 34% of their income on rent. Paying more than 30% of your income towards rent is generally seen as a sign of “rental stress”.

If you’re on the hunt for your next rental property, you’ll be battling it out in one of the tightest markets ever. The latest Domain Rental Vacancy Report shows that national vacancy rates are at the lowest point on record at 1% for the fourth month in a row.

And the last three months’ worth of interest rate hikes, led by the Reserve Bank of Australia increasing the cash rate, will be putting added pressure on rental prices. Many landlords have committed to hiking rental payments to afford higher mortgage costs.

How to find a rental at a better price

It’s safe to say that times are extremely tough for millions of Australian renters. Let’s explore some tips to help you not only find a rental but hopefully nab one at a more affordable price.

• Be proactive and join waitlists

Advertising a rental property is a significant cost for landlords so if they can rent their property without having to advertise, they may choose to do so. Many rental agents have waitlists for certain buildings, or even suburbs. If there is an area you have your eye on, it's worth calling up the agents in this location and asking to join any rental waitlist. That way, if something comes up, they'll call you before it's advertised on the market.

• Consider an alternative suburb

If you’re looking at a few set suburbs for their proximity to work or schools, it can be challenging but it may be worth choosing a different area with more rental stock. This may also help you to find a better price as there could be less demand in the area. If it has a significant effect on your life, such as an unmanageable daily commute, this may not suit your household. But it is an opportunity to explore a different neighbourhood and see a different side of the city you live in.

• Keep your eyes on classifieds

Some landlords choose to rent their properties without using an agent to help save on expenses. After all, landlords are looking to earn the best return on their investment and trying to manage their budgets in the same higher inflation environment as you. Sometimes they'll advertise their rental in the classifieds first, such as GumTree. Don't rule these out as channels to find a rental.

• Moderate your social media presence

Be mindful that the internet never forgets, and that your landlord will get your name on an application. It’s not uncommon to research tenants when considering their application so do a little research into what pops up when you google your name. In fact, one real estate agency advises landlords to “look at potential applicant’s social media footprint” to screen tenants, noting that “if their accounts are public, landlords can ascertain a good picture as to what their private life is like, and therefore how they would treat a home”.

Let’s be realistic about buying

Purchasing a property is often the suggested “solve” for Australians struggling in the current rental market. But this is an unrealistic expectation for many, especially considering that despite a value decline in some capital city property markets, the median dwelling value in Australia is $752,100 (CoreLogic data, June 2022).

Saving just a 10% deposit for a dwelling of this value would mean saving $75,210. In the current environment of rising inflation putting pressure on everyone’s household budget, saving account interest rates are still below annual inflation. RateCity research shows that it would take you over 6 years to save $75,000 in an account earning the highest savings account rate, with weekly deposits of $200.

Not only is the upfront cost of purchasing a property a barrier, but home ownership is simply not the goal for everyone. For example, some Australians are living in areas temporarily for work or have moved to a new city for university.

Only a few months ago, former Prime Minister Scott Morrison said the best way to help renters right now is to “help them buy a house”. But every renter purchasing property is an unrealistic expectation, and it’s not going to solve the rental woes of these Australians.

In response to these comments from Mr Morrison, Australian Council of Social Service chief executive, Dr Cassandra Goldie, said: “Renting should be a decent, secure, long-term option for putting a roof over your head and having a home.”

“The best way to support renters is to lift their incomes so they can better afford rent and build social housing,” said Ms Goldie.

For numerous reasons, renting could be the preferred housing situation for many Australians. While the issues of higher costs of living and lower wage growth may not be resolved overnight, those looking to find a more affordable rental property today could consider trying these tips.

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