PHOTO: Melbourne | Supplied

A certain section of the housing market is in free fall and it means everyone – from buyers to renters, investors and tradies – is in for a big shock. Here’s why.

A massive change is sweeping Australia’s housing market, and whether you rent, own or invest, it’s going to affect you.

House prices are the flashy part of the housing market, but the Reserve Bank of Australia pays very close attention to rents.

Rents are the ticking heartbeat of our housing market because they determine how much investors will earn from their portfolios. They are especially worth watching in difficult times because even when the buying market slows down dramatically, people keep renting.

The RBA released a huge new piece of research on the rental market during the pandemic and it is essential reading. As the next graph shows, rents have turned negative in some of Australia’s biggest markets, and rents for units – i.e. mostly apartments – are suddenly in free fall. (Except for Perth, which has been a contrarian on property for years).