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Quarterly house price to rent ratio in Australia 2017-2020

In the third quarter of 2020, the house price-to-rent ratio in Australia was estimated at 112 percent. An indicator of how strong the property market is, the house price-to-rent ratio was calculated by dividing nominal house prices by rent price indices. After reaching a peak in 2017, the price-to-rent ratio had decreased each quarter until the third quarter of 2019. According to the source, rent prices have increased slightly, while house price indices have seen a decline leading to a decline in price-to-rent ratio.

Is Australia in a property bubble?

Many industry experts believe the country is in a property bubble – indicated by the rapid increase in Australian property market prices to the point that they are no longer relative to incomes and rents, followed by a decline. The house price-to-income ratio has also followed a similar trend, falling to 101.6 percent in the second quarter of 2019, before recovering towards the end of the year. When considering only capital cities, the number of new property listings have similarly declined and was at the lowest number in the year ended May 2019.

Housing demand

Although many major cities have experienced a sharp decline in residential property prices in the past year, with Sydney and Melbourne hit the hardest, the rental market indicates the demand for housing is still variable across regions. The rental vacancy rate, which indicates how many properties are available for rent out of all the rental stock, was relatively high in Sydney. This is positive for tenants, as the already high rent prices will likely not increase as quickly with a lower vacancy rate.

House price to rent ratio in Australia from 1st quarter 2017 to 3rd quarter 2020

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Source

Release date

January 2021

Region

Australia

Survey time period

Q1 2017 to Q3 2020

Supplementary notes

Release date is date the data were obtained.

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Statistics on "Residential housing market in Australia"

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