Australian Property News

Price and rent growth almost on par

Posted on Friday, November 12 2010 at 8:55 AM

Rents and property values have grown at fairly similar rates over the past five years, according to research from RP Data.

Property values across the combined capital cities increased by a total of 40.5 per cent for houses and 42.2 per cent for units over the five years to September.

Meanwhile, rental rates increased by a total of 41.2 per cent for houses and 46.6 per cent for units over the same period of time.

From these figures, it’s evident that the total growth in rents is actually slightly superior to the total growth in property values over the past five years.

In dollar terms, house values have increased by a total of almost $140,000 over the past five years and unit values have increased by around $123,000.

Meanwhile, rents have increased by $127 a week for houses and $135 a week for units.

Over the five years Darwin has recorded the greatest total growth in property values for houses (92.3 per cent), followed by Melbourne (61 per cent). Sydney has been the poorest performer (22 per cent), followed by Hobart (30.6 per cent).

Meanwhile, house rents have recorded the greatest increases in Darwin (76.5 per cent) and Perth (60.2 per cent). Rental growth has been comparatively less in Adelaide (32.6 per cent), Brisbane (32.7 per cent) and Sydney (33.8 per cent).

Darwin also recorded the greatest increase in both unit values and rents over the past five years.

RP Data notes that overall, the findings of this research highlight the virtues of having a long-term hold strategy in relation to property purchases with property values, rents and subsequently yields having historically proven to increase over time.