Australian Property News

Rental market on road to recovery

Posted on Thursday, October 07 2010 at 1:08 PM

Rental markets in Australia’s cities and regions are showing signs of recovery, according to RP Data’s September quarter Rent Review Report.

The report reveals capital city rents increased by 2.8 per cent over the past 12 months but rental growth remained flat both nationally and throughout the combined capital cities during the quarter.

Key findings:

• Weekly rental rates increased nationally by 2.9 per cent over the past 12 months;

• City unit rents over the past five years increased more than houses;

• Canberra and Melbourne were the only cities to record rent increases for houses over the September quarter;

• Darwin rental houses are the most expensive of any capital city followed by Canberra;

• Pilbara in Western Australia has the most expensive rents of all regional markets at $1500 per week;

• Adelaide is the cheapest capital city in which to rent a house, at an average of $320 per week;

RP Data analyst Cameron Kusher said median rents were $350 nationally and $370 in capital cities during the September quarter.

Over the past five years rents had risen 40 per cent across the nation and 42.3 per cent in capital cities.

Kusher said tenants might not be pleased as evidence was mounting to suggest landlords were beginning to lift weekly rents.

However, growth rates across house and unit rental markets were still well below average annual growth of seven per cent and 7.3 per cent respectively.

“In recent times unit rental markets have been outperforming houses,” Kusher said.

He said this result reflected the growth in demand for units as lifestyle preferences changed and affordability pressures increased.

The report shows that across capital cities, houses were most expensive to rent in Darwin, with a median advertised weekly rent of $520.

Canberra was the second most expensive city, with rents of $495 per week, followed by Sydney at $450 per week.

The most affordable capital city in which to rent a house was Adelaide ($320) followed by Hobart ($325).

Darwin was the most expensive city in which to rent a unit ($430) followed by Sydney ($425) and Canberra ($400). Hobart units were the cheapest to rent within a capital city ($278) followed by Adelaide ($280).

During the September quarter, growth in rental rates for houses was relatively flat in every capital city except Canberra (up 3.1 per cent) and Melbourne (up 1.4 per cent).

Some cities recorded rent increases for units over the year, including Melbourne (1.5 per cent), Sydney (1.2 per cent) and Hobart (0.9 per cent).