8 more Aussie regions where rents are set to skyrocket

With Australia’s rental vacancy rate now at its lowest point since April 2006, it’s pushing up rental prices across the board: capital city rental prices saw gains of 11 per cent in the 12 months to March 2022, while regional areas are seeing even stronger growth – up 13 per cent, on average.

With the crunch expected to get worse over the coming months and years, it led Mr Paliwal to predict continued rental surges across a number of key areas over the next one to two years.

Those regions include Brisbane, Adelaide, Perth, Hobart, Canberra, Devonport, Burnie-Ulverstone, Nerang, Bundaberg, Maryborough, Buderim, and Toowoomba.

You can find a breakdown as to why each of these regions is primed for further rental growth here.

Mr Paliwal’s list also included Queanbeyan, Lake Macquarie – East, Kiama-Shellharbour, Wagga Wagga, Barossa, Yorke Peninsula, Warrnambool, and Shepparton.

According to the research expert, these areas could see increased yields of anywhere from $2,600 to $5,200 over the next one to two years. Here’s a more in-depth look at why these areas are set to see higher returns for investors:

1. Queanbeyan, NSW

Situated adjacent to the ACT, the NSW border city is sitting at a record low 0.1 per cent rental vacancy – having dropped over the past three years.

Over the last 12 months, rental prices have already risen more than 13 per cent, offering investors growth of 34.1 per cent over the last decade.

According to Mr Paliwal, rising rental demand is being compounded by a lack of new supply and a low unemployment rate – all factors which will contribute to rent levels continuing to increase.

2. Lake Macquarie – East, NSW

Boasting a rental vacancy rate of just 0.2 per cent at present, Lake Macquarie’s rate has been in decline since 2019.

In the past year alone, the region’s rents have jumped by more than 15 per cent, culminating in a 36.8 per cent rise for the past 10 years. 

3. Kiama-Shellharbour, NSW

Like Lake Macquarie – East, Kiama and Shellharbour have benefited from being coastal towns in close proximity to Sydney.

The region now has a rental vacancy rate of just 0.3 per cent, a decline from the beginning of 2022, which has had the result of pushing up rental prices by 10.8 per cent over the last 12 months. That’s had a compounding impact on the rental rises seen across the last decade, with the area’s rents now 43 per cent higher than they were in 2012.

4. Wagga Wagga, NSW

The regional town’s vacancy rate has been trending downwards since the end of 2019, now sitting at just 0.4 per cent. It’s been a key driver of the 14.3 per cent rental price increase in the area.

With the average rental price in Wagga Wagga having outpaced national rental prices over the past decade with its 29 per cent increase over the past 10 years, Mr Paliwal expects prices to continue to surge.

5. Barossa, South Australia

Barossa’s vacancy rate has been declining since early 2020 – to the current low of 0.2 per cent.

Average rental costs in the area have climbed 7.6 per cent over the past year; a total of 31.5 per cent over the past 10 years.

While Mr Paliwal has noted new house building accounting for 2.58 per cent of the total number of houses, he said it would not be enough to keep up with rising rental demand.

6. Yorke Peninsula, South Australia

It’s been a steep decline for the Yorke Peninsula, with its rental vacancy rate dropping from 2.3 per cent in 2020 to around 0.3 per cent in 2021, where it has hovered ever since.

Rental prices in the region have increased 9.3 per cent over the past year, and with supply set to remain low, Mr Paliwal expects rental yields to be pushed even further up by the high market pressure. Over the past 10 years, Yorke Peninsula’s rental prices have lifted by 22.9 per cent.

7. Warrnambool, Victoria

At the start of the pandemic, Warrnambool’s rental vacancy rate dropped quickly, to now sit at 0.3 per cent. With rental prices having lifted by 40 per cent over the past 10 years, yields have been boosted by 10.5 per cent in the past year alone.

8. Shepparton, Victoria

The Victorian town’s vacancy rate has been in decline since the end of 2019.

Now sitting at a low 0.5 per cent, the vacancy rate has put pressure on prices, to the tune of 9.1 per cent over the past 12 months.

The average price of a rental in the area has gone up by 38.5 per cent over the last decade, with low levels of supply in the pipeline leading to expectations that the price crunch is set to continue.