by Sanjeev Sah | Mar 07, 2023 | Market Updates

Despite the Reserve Bank of Australia’s series of interest rate rises, RBA governor Philip Lowe told a parliamentary hearing that higher interest rates weren’t responsible for the sharp rise in rents occurring in many Australian cities

Rather, Dr Lowe believes strong rental growth (see SQM Research data in the image below) is being driven by the imbalance between supply and demand. 

“With population growth picking up again, we need more construction of dwellings,” he said.

“Otherwise, we’re going to be in a situation of strong rental growth for a long period of time and it isn’t because interest rates are going up. It’s because the supply of rental accommodation is short relative to the demand.”