Australian Property News

Rental rates fall over past year

Posted on Tuesday, September 14 2010 at 10:12 AM

Rental rates for units around Australia recorded lower levels of growth over the year to June 2010 largely because first homebuyer demand was so strong during 2009, according to an RP Data analysis.

First homebuyer demand was strong due to low interest rates, as well as the First Home Owners Boost which dramatically improved affordability, says RP Data research analyst Cameron Kusher.

“As a result, a record number of first-time buyers – who were mostly previously renters – were active during 2009 which in turn eased upwards pressure on rental rates,” he says.

Despite sluggish rental growth nationally over the past year, the RP Data analysis indicated that there are still many suburbs where rental growth is strong.

Across Australia’s capital cities the inner Brisbane suburb of West End recorded the largest increase in rental rates over the year to June 2010, with a 26.3 per cent rise across 303 listings.

Rents in the suburb increased by $100, from $380 per week in 2009 to $480 per week in 2010.

Meanwhile, the inner Sydney suburb of Waverton recorded the greatest fall in median weekly advertised rent; rents fell from $550 per week to $475 per week, equating to a 13.6 per cent drop over 81 listings.

Melbourne and Sydney dominated RP Data’s list of the top 40 suburbs with the greatest growth in median rents over the year to June 2010; the two capitals each had 16 suburbs represented in the list.

Kusher says there’s a clear trend towards the more affordable unit markets which are often located in middle and outer ring suburbs.

He says units in these suburbs are typically more affordable than houses and are more strategically located.

Of the capital city suburbs which have recorded the greatest fall in median weekly rents over the past year, the vast majority are situated within established areas quite close to the city centre.