Canberra lays claim to Australia's priciest rents

COVID-19 has knocked Sydney off its perch as Australia’s most expensive city to rent a home, with that title now belonging to Canberra.

SQM Research’s analysis of rental markets showed the median rent for Sydney houses fell by 7.6 per cent in 2020 to $632.90 per week, while Canberra houses recorded a 3.6 per cent rise over the year to land at $656.70/week.

Rents for Sydney units plunged by 10.3 per cent in 2020, finishing the year at $444.4/week, SQM said.

Melbourne’s market performance was similar, with its house rents falling by 4.8 per cent to $511.70/week, while unit rents declined by 8.7 per cent to $376.90.

Darwin was the nation’s best performer, with house rents rocketing by 27.3 per cent, while Perth house rents rose by 12 per cent in 2020.

“It’s clear Sydney and Melbourne apartment investors were the losers of 2020, with rents and prices falling,” SQM Research managing director Louis Christopher said.

“However, if you owned an investment property in Darwin or Perth, or indeed regional Australia, you have had one of the best years ever.”

Mr Christopher said 2020’s flight to regions was the main driver behind rental rises outside of capital cities, but questioned whether the trend would continue in 2021.

“The truth is we are starting to see at least a part reversal,” he said.

“CBD and inner suburban vacancy rates have been falling again and inner urban agents have been telling me demand has clearly picked up for such properties.

“But I don’t think it is going to be a complete reversal. Demand for inner city property will remain affected by the closure of the international border as well as ongoing caution on future city lockdowns.

“This will mean 2021 will remain largely a tenant’s market in the inner cities, but will also remain a landlord’s market for regional Australia.”

Recent data from CoreLogic showed landlords in regional South Australia were cheering through much of 2020, with four of the top 10 suburbs for rental increases in the state.

SA’s Port Elliot was Australia’s biggest mover among regional markets, with its house rents rising by 23.7 per cent, followed by Kingston (up 23.5 per cent), also in SA.

Manyana in the NSW Southern Highlands was ranked third, with rental growth of 22.8 per cent, while Encounter Bay and Middleton in south east SA rounded out the top five, at 22.3 per cent and 20.1 per cent, respectively.

On the yields side, Collinsville in Queensland took the 2020 title, providing a return of 14.6 per cent to landlords.

Yields in the Pilbara town of Newman in northwest WA rose by 14 per cent, reflecting the strength of the state’s iron ore export industry, while rental yields were up 13.9 per cent in Queensland’s Charleville in 2020.