Australian Property News

Rents stable for the second consecutive quarter

Posted on Monday, October 18 2010 at 9:12 AM

Rents remained stable in most Australian capital cities in the September quarter of this year, according to Australian Property Monitors' (APM) rental report.
Nationally rents fell by 0.3 per cent for houses and 0.5 per cent for units.

The September quarter was the second consecutive quarter where rents held steady, says APM's head of research Yvonne Chan, with the March quarter this year being the last period of positive growth.

"Annual rental growth for houses stood at 2.8 per cent, which is well below the long-term average growth rate of 6.8 per cent," she says.

"Rents for units grew by a stronger 4.8 per cent over the year but still performed well below their long-term average of 7.3 per cent."

Despite a flat rental market, Chan says the outlook for rents is still one of growth.

"Demand and supply pressures remain as population growth continues," she says. "Tight vacancy rates, together with a strong economic outlook, will lead more of the population into the rental market and inevitably higher rents."

Adelaide, Hobart and Darwin were the only capitals to experience house rental growth over the September quarter and their rises offset falls in Melbourne and southeast Queensland, which drove the decline in national rents.

Meanwhile, Hobart was the only capital where rents for units increased.

Chan says the star performer for the quarter was Darwin, which recorded the strongest rental growth for houses at 3.8 per cent, pushing the median weekly rent to $550 a week, the highest in the nation and $70 more than the next most expensive city of Sydney.

"Rental growth in Darwin and Perth have been by far the strongest performing cities over the past five years, each growing at 10 per cent or more each year, for both houses and units," she says.

According to Chan, the softening of the rental market can be attributed to the large number of first homebuyers, who were drawn from the rental market by historically low interest rates and the First Home Owners Boost.

"Although first homebuyer numbers have returned to normal, we're still seeing a delayed flow-on effect on rental demand," she says.

Despite low vacancy rates in most cities and strong employment figures, Chan says a fall in consumer sentiment in September and continued concerns over the global economy means landlords have continued to be conservative in raising rents.

Median Weekly Asking Rents - Houses
  Sep-10 Jun-10 Sep-09 % change % change
Sydney 480 480 455 0.0 5.5
Melbourne 360 365 360 -1.4 0
Brisbane 360 360 360 0.0 0
Adelaide 330 325 310 1.5 6.5
Perth 370 370 350 0.0 5.7
Hobart 310 300 300 3.3 3.3
Darwin 550 530 500 3.8 10
Canberra 450 450 420 0.0 7.1
Median Weekly Asking Rents - Units
  Sep-10 Jun-10 Sep-09 % change % change
Sydney 440 440 415 0.0 6
Melbourne 345 350 330 -1.4 4.5
Brisbane 340 340 340 0.0 0
Adelaide 265 265 255 0.0 3.9
Perth 350 360 350 -2.8 0
Hobart 250 240 230 4.2 8.7
Darwin 430 450 440 -4.4 -2.3
Canberra 410 410 400 0.0 2.5


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