Bad news for tenants: rent in capital cities near record levels
Asking rents in capital cities have remained at or near record levels over the last quarter, according to the Domain Group Rental Report.
The median weekly asking rent for units increased by 0.1% over the December quarter, while houses increased by 0.6%.
Median asking rents for houses increased in Sydney, Adelaide and Hobart over the December quarter, while all other capital cities remained steady.
The asking rent for units increased in Sydney, Adelaide, Hobart and Canberra, while Brisbane and Darwin remained steady and Perth and Melbourne decreased.
Domain Group senior economist Dr Andrew Wilson said the decreases in Perth and Melbourne came down to the adjustment of Perth’s market, and Melbourne experiencing an influx of new property.
“In Perth we are continuing to see an adjustment of the rental market while Melbourne landlords are feeling the effect of recent new apartment construction,” he said.
Although significant numbers of new apartments are being built in other markets, such as Sydney, demand is still pushing prices up.
“Despite record level investor activity and increased dwelling construction, demand for rental properties continues to outstrip supply, resulting in tight vacancy rates and high asking rents in most capital cities.”
It’s a tough time for tenants, with overall vacancy rates in capital cities remaining at a low 2.4%.
However, Wilson predicted that, while Sydney renters will still feel the strain in 2015, there could be some relief for those in other states.
“Upward pressure on rents is set to continue through 2015, particularly in the robust Sydney market where underlying demand continues to outstrip supply,” he said.
“Increased new apartment supply in Brisbane and Melbourne will, however, continue to provide more choice for tenants with continued relief in rental growth a prospect.”