2 days ago
Relief on the horizon for Aussie renters
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Property expert and best-selling author, Lloyd Eged. Pic: Ubora Photography
After years of relentless interest rate hikes, landlords hiking rent in response, and record occupancy levels, a break may finally be on the horizon for renters.
According to the managing director of Aus Property Professionals and author of Positively Geared 2e, Lloyd Edge, falling interest rates are beginning to entice buyers, including investors, back into the market, which could start to ease rental pressure over the next six to twelve months.
"We're seeing more people buy in certain areas," Edge says. "As interest rates come down, it becomes slightly more affordable to own - and that reduces rental competition."
While this shift remains subtle at this stage, it signals the beginning of a reprieve that has been a long time coming.
Undoubtedly, it's music to the ears of renters and first home buyers who have seen very little light at the end of the tunnel since the first of Australia's 13 consecutive rate hikes began in 2022.
Buyers returning, investors re-engaging
Cotality's March 2025 Housing Market Update confirms the trend: investor lending has risen for four consecutive months, driven by improved borrowing conditions and the Reserve Bank's April rate cut.
At the same time, reports of early signs of easing rental growth in Sydney and Melbourne have been coming through, as well as a modest rise in vacancy rates.
These shifts are especially visible in outer-suburban and regional growth areas.
"In Melbourne, we're seeing more rental stock open up in the city fringe areas that often appeal to first home buyers due to affordability, such as Geelong," Edge explains.
"Geelong is only 70 kilometres from Melbourne. It's very close and an easy drive, and it's also very close to the coast. That, coupled with the affordability, makes it very attractive. I think prices are going to take off there pretty soon, so it's not going to be that affordable for long."
Meanwhile, in Brisbane, he points to a notable increase in buying activity north of the city, particularly around Moreton Bay, Murrayfield and Deception Bay.
"People are moving out from inner areas like Manly and Wynnum and buying further north," Edge observes. "That movement is reducing rental pressure in those zones."
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Dual-income properties in demand
One of the strongest trends Edge has observed is growing interest in dual-income properties - dwellings with two rentable components such as a duplex or a home with a detached granny flat.
"A lot of investors try to chase that golden egg, which is having positive income, positive cashflow from the property, as well as try to get the capital growth," Edge says.
"These set ups help with serviceability, meaning they can buy more investments down the track. They've got higher entry income, which is attractive to banks."
Dual income properties are an appealing option not just for investors but for first home buyers and extended families.
"As more people are able to enter into the market with interest rates coming down, we're probably seeing a little bit more of this buying pattern at the moment," Edge says.
"I'm also seeing people actually build these types of properties where they plan to live in one side and rent the other side out or even put extended family in the other side as well."
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Relief, but no miracles yet.
The reality is that not all suburbs will see rental relief.
In high-demand inner-city areas like Fitzroy, Carlton, Richmond and Brighton, Edge says buyer activity hasn't reached a tipping point, meaning that available rental stock is likely to remain tight and prices will stay high.
"People want to live there, but it's expensive to buy into these areas. So rental demand is still strong and prices will probably hold."
Even in areas where prices have softened, such as parts of Melbourne that saw a significant decline in investor interest due to the Victorian Government's land tax changes, there's still a long road to full recovery.
"Melbourne has historically been the second-highest growth market in the country behind Sydney, now it's fallen to the sixth," Edge says.
However, this too is beginning to shift.
"Investors are starting to return to the Melbourne market, trying to get a bargain, in high-growth, high-demand suburbs like Geelong and the Bayside suburbs. They're realising that the land tax that everyone's been scared of isn't as bad as what was portrayed in the media," Edge says.
One of the many off-the-plan homes under development in Sunbury
Infrastructure, sentiment and the bigger picture
Despite the increasingly rosy outlook, Edge is quick to caution that it will take more than easing interest rates to fix Australia's housing crisis.
The biggest issues, he believes, are structural.
"There's plenty of land around Melbourne, especially near places like Sunbury, which is near the airport and relatively close to the CBD, but the infrastructure isn't there yet," he says.
"We need transport, jobs, planning - otherwise people won't want to live there, and the pressure stays on the same suburbs."
Zooming out and applying a macro view, Edge also warns that broader economic shifts could affect momentum.
"If inflation rises in response to what's going on globally, the RBA might reverse course," Edge says.
"Some people are concerned about what's happening abroad as well, around what's happening in China and with America and the Trump tariffs. Some of those macroeconomic policies, while they don't necessarily or directly affect the property market, can affect sentiment. Buying and selling property is all about sentiment - a property is only worth what people want to pay for it."
One of the many off-the-plan homes under development in Sunbury
What can renters expect?
So what does this mean for renters right now? Generally, it's good news, with all indicators and metrics indicating that rental pressures will continue to ease, just not overnight.
"We're watching the amount of people looking through homes and the number of rental properties available," Edge says.
"As more people buy in certain areas, that's going to ease up some of the rental pressure, and that's what I'm seeing at the moment as people are starting to buy a little bit more with the interest rates starting to come down."
Edge encourages renters to stay informed, act fast when good listings appear, and keep an eye on emerging suburbs with improving infrastructure.
"Ultimately, if it becomes cheaper to buy than rent, and people are happy to live in a particular location, then there will be far less pressure on rentals."
