Even though rental rates in Melbourne and Sydney have also increased by 1.7 and 1.4 per cent, respectively, it is only Canberra tenants who experienced a steep hike in living costs. Capital city rental rates across the country averaged a 0.2 per cent drop.
“Canberra is the only capital city where rental growth is accelerating, whereas it’s slowing across all capital cities,” said Cameron Kusher, CoreLogic research analyst. “At the same time last year, rental rates increased by 1.7 per cent, which indicates a sharp slowdown in rental growth over the past year.”
Some of the factors contributing to the slowdown in renal growth include falling real wages, excess rental supply in some cities, and lower population growth rate.
“One of the main factors contributing to what we’re seeing in Canberra comes down to population growth,” Kusher said. “What’s happening in the ACT is that interstate migration isn’t overly strong, but overseas migration has been picking up in the last few quarters.”
Still, Canberra’s rental rates are still behind the peak prices recorded in 2012, which had a median rental price of $539 a week. According to Kusher, the present rental rates will eventually catch up as they will continue to rise until new developments are complete.
“We’ve seen a bit of a bounce in unit approvals, but that will take some time to enter the market,” he said. “There could be an 18 to 24-month lead time for these units to actually be constructed.”
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