News

Tight rental markets in most capital cities continue to put strong upward pressure on rents with annual increases now surging ahead of incomes growth.

Latest Domain data reports that Canberra, Melbourne and Sydney have clearly recorded the highest annual growth rates with May quarter median weekly asking house rents increasing by 6.4 per cent, 5.0 per cent and 4.8 per cent respectively compared to the same period last year.

Adelaide and Hobart also recorded solid annual house rent increases each up by 2.9 per cent over the year. Autumn house rents house rents were steady over the year in Brisbane but were down sharply by 9.3 per cent in Darwin and 10.0 per cent in Perth.

Autumn unit rents have also increased steeply in a number of capitals despite recent high levels of new apartment development. Hobart, Melbourne, Canberra and Sydney are the top performers with annual rises of 10.7 per cent, 5.3 per cent, 5.0 per cent and 3.8 per cent respectively. Adelaide unit rents were steady over the past year with Brisbane down by 1.3 per cent, Darwin down 6.8 per cent and Perth falling by 11.8 per cent over the past year.

Sydney remains the most expensive capital for tenants with median weekly asking houses rents over the May quarter at $550. Adelaide, Hobart and now Perth reported the lowest house rents with each at $360 and well below Sydney. Sydney unit rents are also the highest of all the capitals at $540 per week and significantly ahead of the next placed Canberra at $420. Adelaide recorded the lowest capital city unit rent over the May quarter at $290 per week.

Rents can be expected to continue to increase strongly in most capitals driven by increased migration, relatively low numbers of first home buyers and an underlying shortage of rental accommodation. Actions by policymakers and banks to restrict activity by residential investors will only add to the current imbalances between rental supply and demand with even higher rents the logical outcome.

Source: domain.com.au