A report from ANZ Bank and CoreLogic said the slowdown would be a reprieve for renters as data indicated that some of the large regional markets were approaching a peak in rent values while others had already moved into a downswing.

The Gold Coast market has seen reduced growth in rents after rises of 40 per cent since March 2020.

“Since March 2020, rent values have increased more across the regional market at 28.8 per cent, compared to a 24.4 per cent uplift in the combined capital cities market of Australia,” the report said.

However, the growth trajectory for regional Australia and the capitals has diverged over recent years, with the rate of growth now easing in regional Australia.”

It said lower income renters had been disproportionally affected with rental costs now taking half their income.

The pressure on renters was expected to lead to bigger households as affordability becomes stretched. That was a departure from the pandemic-related shift to a record low in people per household of 2.49. That shift added an extra 120,000 households nationally.

“The year ahead may see greater formation of share houses. Additionally, CoreLogic data has shown longer hold periods on rental properties through the pandemic, where tenants may “find it easier to renegotiate a lease with their current landlord, rather than try and compete for a limited number of available rent listings.

The report pointed to other demand-driven shifts in the rental market which it said may see internal migration favouring more affordable markets.

“A good example is the recent shift in migration patterns across Queensland. In the year to June 2022, ABS data shows the Logan – Beaudesert and Ipswich SA4 regions with the first and third highest volumes of net internal migration across the country, overtaking the Gold Coast, which had the highest net internal migration in the year prior,” the report said.

“These markets have relatively low median weekly rent valuations compared to the Greater Brisbane market.”

Townsville was another market where the heat appeared to be coming out of the rental market with a small reduction in unit rents after an 18 per cent increase since 2020.

“Some dwelling markets have not yet seen rent value declines, but the pace of increase has started to ease, and declines in rents may not be far off. In Moreton Bay – South, and Brisbane – East, growth in house rents slowed to less than half-a-percent in the three months to April,” the report said.

In contrast, Mackay’s rents have risen 3 per cent in the past quarter and Brisbane North rents were up 4 per cent.

But the report said the market was still tight and total rental listings nationally were down 38 per cent on the average of the past decade.

Immigration was expected to add pressure to the market but the report said this would be skewed towards Sydney and Melbourne which had traditionally been the places that attracted immigrants.

The share of income dedicated to paying rent in Greater Brisbane was 30.5 per cent, making it more expensive than Melbourne. Servicing a mortgage in Greater Brisbane was now consuming about 39 per cent.