While homeowners are dealing with the ninth consecutive cash rate rise since May last year, Compare the Market warns that renters could also feel the brunt of the RBA’s latest 25 basis point increase.
Mortgage repayments have increased dramatically for homeowners across the country and in many cases, landlords are passing these costs onto their tenants in the form of higher rent.
New research from Compare the Market shows that more than half of renters have seen their rent increase in the past 12 months.
The comparison website’s January survey found that 53.9% of renters have seen their average monthly rent increase by $161 in the last 12 months. Over a year, that means the average renter is forking out an additional $1,932 on rent alone.
The data revealed that Western Australians have seen their rents increase most around the country, by an average of $180 a month ($2,160). Queensland came in second at $177 a month ($2,124), while Victoria rounded out the top three at $169 a month ($2,028 a year).
Meanwhile, the findings show that while the average rental price has also increased in South Australia and New South Wales, it hasn’t been as much as in other states.
Those in New South Wales are paying around $142 more a month ($1,704), while South Australians are paying $158 more a month ($1,896 a year).
According to Compare the Market’s Natasha Innes, these astronomical prices are having an impact on Aussies who are already doing it tough.
“From insurance premium price hikes, rising grocery bills and exploding energy prices, the last thing Aussies need is for their rent to increase,” Ms Innes said. “Unfortunately, that’s what we’re seeing, putting more households under further financial pressure.
“These aren’t small increases that Australian renters are experiencing,” Ms Innes said. “Over a year, it’s enough to pay for a return trip overseas, fill up a 50-litre tank car around 22 times or potentially pay for more than a year’s worth of electricity.
“With homeowners facing nine consecutive rate rises, their mortgage repayments have increased dramatically since last May. Many landlords are passing these costs onto their tenants, which is why we’re seeing rental prices soar around the country. As long as those rates continue to rise, it’s fair to say that renters could continue to feel the brunt in the coming months.
“Similarly, we’re seeing demand for rental properties increase around the country, especially since borders have reopened and international students have returned. People are prepared to pay big bucks to secure the home they want, so real estate agents and landlords are able to request higher prices,” Ms Innes said.
Worryingly, it appears that rent increases are impacting saving abilities, with Compare the Market’s findings showing that:
- 27.1% of Australians haven’t been able to save
- 36.8% haven’t been able to save as much as they usually would
- 12.1% have seen their savings go backwards.
“We don’t want to see Australians dipping into their savings to cover daily expenses like rent,” Ms Innes said. “Ensure you’re able to afford any rental increases before you sign away on the dotted line. Like we saw in 2022, we are expecting further financial stress in 2023.”
Ms Innes’ top tips to help renters tackle rental increases.
- Before accepting a rental increase, see how other rental prices in your area compare. If you feel a rise is too high, ask if it can be lowered or negotiated. If not, you may want to look for something more affordable.
- Be aware that there are local laws that landlords need to abide by if they are increasing your rent. If the proposed increase isn’t in line with your lease contract and local laws, it may be void.
- Always get agreements in writing, as it covers you in the event of ongoing disputes. If discussions occur in person, always send an email to recap what was said.
- Decide whether it’s worth paying extra in rent or if you’d save by moving. Keep in mind that there are often costs associated with moving, such as removalists, cleaning fees and energy disconnection fees.
Below is a breakdown of all the rental increases rules by state, with links to each state’s residential tenancies framework. Refer to these documents for more information, and consult your state/territory’s relevant body for help disputing your rent increase:
|State/territory||How often can landlords increase rent for a periodic lease?||By how much can landlords increase rent?||How much notice must they give you?|
|NSW||Once every 12 months for periodic leases.||Not an ‘excessive’ amount. Tenants can complain to the NSW Civil and Administrative Tribunal (NCAT) within 30 days if deemed excessive.||At least 60 days (written notice).|
|VIC||Once every 12 months for periodic leases.||Not ‘unreasonably’. Tenants can complain to VCAT (Victorian Civil and Administrative Tribunal) within 30 days if deemed excessive.||At least 60 days (written notice).|
|QLD||Once every 6 months.||Not ‘unreasonably’. Tenants can complain to QCAT (Queensland Civil and Administrative Tribunal) within 30 days if deemed excessive.||At least 2 months (written notice).|
The notice must include the date and amount of increase.
|WA||Once every 6 months.||Not an ‘excessive’ amount. Tenants can apply to the WA Magistrates Court if they feel the increase is excessive.||At least 60 days (written notice).|
|SA||Once every 12 months. Rent cannot be increased in the first 12 months of the lease.||Not an ‘excessive’ amount. Tenants can complain to the South Australian Civil & Administrative Tribunal (SACAT) within 30 days if deemed excessive.||At least 60 days (written notice).|
|TAS||Once every 12 months, after the tenancy agreement began or was renewed.||By a ‘reasonable’ amount. Tenants can complain to the Residential Tenancy Commissioner (RTC) if they deem the rent increase to be excessive.||At least 60 days (written notice).|
|ACT||Once every 12 months from the date of the last increase.||In line with the ‘prescribed amount’ as set out in the regulation (see below). Tenants can complain to the ACT Civil and Administrative Tribunal (ACAT) if the rent increase is deemed excessive.|
ACAT recommends a rent increase is excessive if it is 110% or more of annual CPI (inflation).
|At least eight weeks’ written notice.|
|NT||Once every 6 months and not within the first six months of the lease. Rents can only be increased if the right to do so has been written into the tenancy agreement.||Not by an ‘excessive’ amount. Disputes can be taken to the Northern Territory Civil and Administrative Tribunal (NTCAT).|
|At least 30 days’ written notice.|
The notice must state the intention to increase the rent, the amount increase and the date it changes.
|Source(s): Each state/territory’s Residential Tenancies Act and Residential Tenancies Authority.|
Rental increases deemed ‘excessive’ are different in each location, but generally, rental bodies deem increases to be excessive if they’re too different from similar market rents, or if there’s a sizeable difference compared to the current rent, the property has outstanding repairs needed etc.
For more information, please contact:
Phillip Portman | 0437 384 471 | [email protected]
Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy home and contents, car, pet and travel insurance along with energy products from a range of providers. Our easy-to-use comparison tool helps you look for a range of products that may suit your needs and benefit your back pocket.