The prices for rent across capital cities have either risen or remained flat with only a couple of exceptions, according to a quarterly report.
Only Darwin and Perth saw a decrease in weekly asking rents which reflects the strong competition among rental properties in most capital cities, indicates the September Domain.com.au Rental Report.
The report also came across the following findings:
- There is no relief for Australian tenants given the increases
- Sydney’s rents rose at its fastest rate in four years, and its units’ rents are now exceeding Darwin making them the highest of all the capitals
- Sydney has the lowest rental yields, while Hobart has the highest yields for investors
- Low vacancy rates in Melbourne and Sydney are tightening further
“Capital city rental markets remain a battleground for tenants, with high levels of competition for available properties continuing in most cities,” said Dr Andrew Wilson, senior economist for Domain.com.au.
“Despite the number of new developments, record high rents are consolidating and already low vacancy rates are tightening. Low numbers of first home buyers, and solid migration towards cities is keeping demand for rental properties generally, well ahead of supply.”
Sydney’s median rental cost increased by 1% over the September quarter to a new record high of $530 per week (up 3.9% year-on-year). Rents for units jumped 2% over the quarter to a new peak of $510 per week (up 3% year-on-year).
Wilson said that Sydney is the leader of the capital cities this quarter, with rental prices continuing to rise, despite an increased supply of properties available. Additionally, he mentioned low levels of first homebuyers are offsetting investor activity.
And despite record levels of new buildings, this is not having much of an effect, as demand is still exceeding supply.
“The increased rental rates in Sydney – it’s now the most expensive capital in Australia for unit rental – is a concerning trend for first home buyers.
Notwithstanding the deposits required for purchasing property, increased rents means there are more outgoing expenses for first home buyers and therefore more time and saving needed to meet the requirements.”
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