International arrivals drive revival of CBD rentals

Australians are again being drawn to inner-city living, and the surge of interest is delivering a shot in the arm to CBD markets just when it’s most needed.

PropTrack reports that the total number of realestate.com.au searches for rentals in capital city CBDs in the first 10 weeks of this year was 27 per cent higher than the same period last year.

Melbourne’s been the biggest winner of the returning desire for city life, with searches for housing in its central ring up a substantial 47 per cent.

Correlated to this, the level of interest in CBD properties has been on the rise, with homes receiving a higher number of views per listing in every city except for Darwin.

Adelaide’s CBD experienced the biggest jump in average views per rental listing, with 88 per cent more interest, followed by Melbourne’s Docklands, up 61 per cent, and Melbourne’s CBD, which rose by 47 per cent.

Australia’s open international borders are seen as a significant contributor to this uptick in activity. PropTrack reports that searches from overseas have been a primary driver of this growth.

In the 12 months prior to the COVID-19 pandemic, 10 per cent of all CBD rent searches on realestate.com.au came from overseas. After March 2020, this figure unsurprisingly dropped off. A lack of international arrivals due to Australia’s closed borders, coupled with city residents seeking more space in outer areas during lockdown, crippled the city residential markets, with flow-on impacts to commercial and retail as well.

2022 has heralded the return of international rental searches, with the share of overseas queries on realestate.com.au surpassing 10 per cent in both January and February.

The United Kingdom accounts for the largest share of overseas searches for rentals, followed by the United States and then New Zealand. Indonesia, Japan and India fill out the top six.