Rental prices have risen in most Australian capital cities according to the June Domain.com.au Rental Market Report.
The quarterly report indicates rental demand is outstripping supply in most states, but suggests that relief may be on its way for tenants.
The median weekly asking rent for houses in the closely-watched Sydney market has increased sharply by 1.9% over the June quarter to a new record high of $530. Although rents for units were steady at $500 per week over the quarter, they remain also at record levels.
“We would have expected some rental relief for tenants by now. The continued increase in rental prices is indicative of the low numbers of First Home Buyers and the pressure on the rental market as a result,” Domain senior economist, Dr Andrew Wilson told Australian Brokernews.
“Unprecedented residential investor activity in Sydney over the past year and a surge in new dwelling construction have failed to provide rental relief for tenants with house rents increasing by 3.9% over the year and unit rents up by 1%.”
Down in Melbourne house rents also remained at record levels over the June quarter with a median weekly asking rent of $390 – an increase of 2.6% over the year. Melbourne unit rents, however, increased by 1.4% over the June quarter to the record high of $370 – the same recorded over the June quarter 2014.
“Although rents have increased over the past year, Melbourne remains relatively affordable compared to other capital cities. It is interesting to see that rent for units has increased over the June quarter, despite record new inner-city construction and developments,” Wilson said.
Meanwhile, Brisbane house rents have recorded no increase over the past year, but unit rents are up by 1.4$ annually. House and unit rents in Adelaide remained flat over the June quarter, however the data indicates a slight increase in house rents of 1.4% over the year, and similarly an increase in annual unit rents of 1.8%
Canberra house rents remained steady over the June quarter and were also steady over the year. Similarly, Canberra unit rents were steady over the quarter but increased by 1.3% over the year. Perth and Darwin rents, however, continued to fall over June quarter, dropping 4.4% and 7.7% respectively.
Although the Domain Rental Report indicates rents have continued to increase or consolidate in most markets, Dr Andrew Wilson suggests that there are signs of easing of vacancy rates in some capitals over June.
“The data indicates that increased investor activity and construction may be offsetting the rising demand for rental properties. The demand is driven by solid migration levels and low first home buyer numbers,” he said.