Wednesday 6 July 2022 02:21 AM Rent hits 14 YEAR high as interest rates soar: Here is where rent is most ... trends now
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Annual growth in rent has hit a 14-year high in Australia just as home buyers face rising interest rates.
The Reserve Bank on Tuesday announced a third hike in the cash rate in as many months, taking it to 1.35 per cent.
The 50 basis point rise is estimated to add $137 a month to a $500,000 mortgage, or $499 per month on a $750,000 loan.
The RBA board has flagged further rises, with some economists expecting the cash rate to hit 3.5 per cent next year before the central bank starts to consider cuts.
The decision coincides with the release of CoreLogic's Quarterly Rental Review which showed the national rental index increasing 0.9 per cent in the month to June and 2.9 per cent over the June quarter.
Everybody's Home spokesperson Kate Colvin said the low rental vacancy rates combined with interest rate hikes is leading to a rental squeeze as investors pass on those rises to renters.
'With further interest rises expected, the already difficult situation will only get worse as renters fight in a hunger games style battle for dwindling rental stock at higher than ever prices' Ms Colvin said.
'This is very concerning as many are already stretched beyond their financial means.'
After the Reserve Bank of Australia raised interest rates again on Tuesday, investment property owners will likely look to raise rents to try and recoup some cash on their mortgage bills (stock image)
House rents are 8.8 per cent higher across the capital cities and up 10.8 per cent in regional areas compared to June 2021, according to the CoreLogic data.
Meanwhile unit rents are up 9.8 per cent in the capitals and 11 per cent in regional areas.
'This sustained period of strong rental growth has seen national dwellings record the highest annual growth in rental values since December 2008,' CoreLogic research analyst Kaytlin Ezzy said.
