Australian rent prices: Regional rents soar amid pandemic tree-change effect

Asking rents in popular regional towns are still soaring as pandemic tree changers think about making a permanent move.

But the stunning pace of growth could slow as capital city employers encourage workers back to CBD offices, at least part of the week.

Coastal lifestyle hot spots such as Byron Bay and Noosa have recorded rent growth of more than 20 per cent over the past year, the latest Domain Rent Report for the March quarter, released on Thursday, showed, as the rise of remote working prompted an exodus from major cities.

“We have had this flow of sea and tree changers,” Domain senior research analyst Nicola Powell said.

“During this period of time people have tested whether they actually ant to do a sea or tree change permanently.

“Working from home has allowed people to make life-changing decisions, test them temporarily, to see if that’s what they would want to do for the longer term.”

Some hot spots are small towns, meaning any influx of residents can have a quick affect rental demand for the few homes available and push up prices, she said.

But, the growth spurt might not last.

“Moving forward, I do wonder what is going to happen once our cities begin to repopulate and we see a return to the office, even if it’s a hybrid,” Dr Powell said.

“Are these regional rental markets going to see this pace of rent growth?”

If workers spent two or three days in an office, the towns with good connectivity to major cities, such as on an arterial road, were the ones where prices were more likely to hold, she said.

NSW

Byron Bay is the hottest destination for sea changers in NSW, with demand now spilling into neighbouring towns.

Rents across the Byron Bay council area have shot up 26.4 per cent in the past year to a median $885 a week for a house, Domain figures show.

Median weekly asking rent, houses

Source: Domain Rent Report, March quarter 2021

Potential tenants facing an ultra-competitive market are looking farther afield, with rents in Lismore, Ballina and Coffs Harbour all rising more than 11 per cent.

“It’s extraordinary, the rate of growth Byron has seen,” Dr Powell said.

“It will get to a point when it will reach its height. When you get that level of rental growth, the people more impacted are the locals — locals aren’t able to afford such a hefty rise.”

Victoria

Victoria’s alpine region recorded the biggest jump in house rents across the state, up 25.7 per cent in a year to a median $440 a week, despite not being commuting distance from Melbourne.

Rents also jumped by double digits in south Gippsland, Wangaratta and the Latrobe shire.

Median weekly asking rent, houses

Source: Domain Rent Report, March quarter 2021

“I do think it’s those seeking a lifestyle change,” Dr Powell said. “If you’re trying an area, you’ll rent before you purchase.”

Rents rose in every regional council area across the state and rental markets are also tight in commuter centres, up 3.8 per cent in Geelong, 8.8 per cent in Bendigo and 2.9 per cent in Ballarat.

Queensland

Sea changers have been flocking to Noosa, sending house rents up 22.6 per cent in a year to a median $650 a week.

Median weekly asking rent, houses

Source: Domain Rent Report, March quarter 2021

Interstate moves into Queensland are at the highest level since 2006, Dr Powell says, as sea changers from the southern capitals move to warmer climes.

“Queensland has always been a very popular location for interstaters to move to and what the pandemic has done is accelerate that,” she said.

“That’s playing out in those lifestyle locations — Gold Coast, Sunshine Coast, Noosa, they’ve all seen big jumps in asking rents.”

The mining industry rebound has also pushed up prices, with rents in Gladstone and Isaac up more than 20 per cent in a year.

Western Australia

Iron-ore town Port Hedland recorded a stunning jump of 36.1 per cent over the year, with the median house rent now $575.

Median weekly asking rent, houses

Source: Domain Rent Report, March quarter 2021

A recovering resources industry, combined with interstate border controls during the pandemic, meant fly in, fly out workers were suddenly looking for rental accommodation within Western Australia, Dr Powell said.

Rents in the East Pilbara also jumped more than 20 per cent in a year.

South Australia

In South Australia, the coastal town of Victor Harbor, outside Adelaide, recorded the strongest growth in rents of any regional centre in the state.

Victor Harbor house rents jumped 30.4 per cent in a year to a median $450 a week.

Median weekly asking rent, houses

Source: Domain Rent Report, March quarter 2021

The next biggest jump was Mount Gambier, up 12 per cent to a median $303, but almost every regional council area in the state recorded rising or flat rents.