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Anyone who has been keeping an eye on the property market in Australia – which we know all of you savvy investors have been – would know that there’s been a rental crisis going on for quite a while.
Its current status?
Well, it looks to only be getting worse with vacancy rates reaching record lows. Experts are predicting further declines given the low supply and increased migration throughout the country. So what does this all mean?
While the outlook for renters looks relatively grim as they struggle to secure affordable homes, there’s still space for investors to make smart, strategic decisions, and opens up a window of opportunity for people considering entering the market and starting their investment journey. So, let’s take a look at it.
What’s the data saying?
According to SQM Research, the national vacancy rate fell to just 1% in January 2025, dropping from 47,336 available rental properties to just 31,822.
When we look at the data year-on-year, this shows a fall of 0.1%, which only goes to show that this crisis isn’t easing – it’s just getting worse.
SQM Research Managing Director Louis Christopher even confirmed; “The sharp decrease in rental vacancies strongly indicates Australia’s rental market crisis is far from over—it could deteriorate further.”
But what’s actually driving this?
High Migration Levels
More people entering Australia and deciding it’s a solid place to live (we can’t blame them right?) means there’s more demand for rentals. Not only this, but we’ve seen an influx of people from larger cities like Sydney and Melbourne deciding on a change of pace – flocking to smaller cities such as the Gold Coast, which is driving up demand in areas that aren’t as equipped to keep up.
Low Housing Supply:
People need houses to live in, right? And with more people, comes more need for housing – which, considering the slow rate of new builds, is putting A LOT of pressure on supply and demand – driving prices up. And people don’t just need houses, they need AFFORDABLE houses.
Affordability Issues:
Which brings us to this. The lack of affordability is a key factor in the drop of vacancy rates, despite all of this migration. Property is getting more expensive to buy, which means investors are bumping up the price of rent in order to service their mortgages, and this falls to the renters – making it super tough for some to afford to rent, let alone buy.
What this means for renters:
For renters, unfortunately this means competition within the market remains pretty tough and securing an affordable lease will continue to be a battle. And while this can feel overwhelming and disappointing, for those who have the means or are in the position to take calculated risks, journeying into investment could be a way to approach this crisis from another angle.
Here at Propell we work to understand our clients unique situations, crafting plans and strategies that work to meet your goals, within your budget and on your terms. So, if this is something you’d like to explore more, we’re here to help.
What this means for investors:
For investors, the upward trajectory of property prices means that rental yields are rising – making property investment a very attractive opportunity. Higher rental yield means more money in your pocket, and with the right properties in the right locations, being an investor at a time like this where migration, supply shortages and affordability are key factors means you can make some big gains within your portfolio.
So the moral of the story? Now is the time to take advantage of these market conditions and start putting a solid plan in place so you can make the most of this crisis.
Here at Propell, we constantly have our finger on the pulse with market updates and the latest data, so you can be sure we’re always there to guide you with the most up-to-date and relevant information.
Having an expert team behind you in times like this can help you feel supported and confident while navigating tricky conditions, and put you ahead of the game.
If you want to chat more about how we can help you throughout your investment journey, or even if you want to chat about whether or not it’s possible for you to get started, reach out to us HERE or give us a call on 1300 776 735.
