Sydney leads in record high house rents in Australia’s state capitals
Australia is experiencing record high house rents in most of its state capitals despite increased supply from investors and developers according to the Domain Group’s Rental Report for the March quarter.
The report showed a 0.8% increase over the March quarter in the national median weekly asking rents for houses, while unit rents also increased by 0.4%.
Although Sydney has recently experienced record investor activity, continuing housing shortages means it is still one of the most expensive capital cities for tenants with median asking rents at $520 per week for houses and $500 per week for units -the highest level on record for the city.
Melbourne also experienced record growth in house and unit rents over the March quarter with a 2.5% increase in the median asking rent for houses to $390 per week and a 1.4% increase in unit rents to $365 per week.
“The prospect of lower interest rates, relatively high comparative yields and capital growth will continue to fuel residential investor activity, particularly in the Sydney market,” explained Domain Group senior economist Andrew Wilson.
“Melbourne, Brisbane, Adelaide, Hobart and Canberra are also likely to record continued growth in house rents over 2015, reflecting tight local rental markets. Unit rents in Brisbane, Canberra and Melbourne, however, are likely to continue to shift sideways due to recent apartment construction in both those cities.”
“Upwards pressure on rents is set to continue through 2015 in most capitals with the exception of Perth and Darwin,” he said.
Although Perth house rents remained steady at $450 per week over the March quarter, the market continues to weaken as annual growth decreased by 5.3%, while unit rents decreased by 3.8% over the year. Darwin experienced a similar situation with falling house and unit rents over the March quarter.
Wilson explained that weakening economic activity, particularly from the resource sector, in addition to affordability barriers, are likely to “continue to impact the Perth and Darwin rental markets with continued downward pressure on rents predicted in both those cities.”
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