Rents are rising by as much as 13% per year in Australia’s most popular suburbs, according to the latest data from a national property management agency.
As the rental squeeze continues in most of Australia’s major cities, data from RUN Property reveals that tenants in popular locations are now paying up to $60 per week more for their accommodation than they were a year ago.
According to January data, 24 suburbs in Sydney and 18 in Melbourne have seen rental increases of more than 6% when new tenants move in.
Edgecliff proved to be the major rental hotspot in Sydney, showing a 12.6% increase in weekly rents, while Fairfield (13.4%) topped the list for Melbourne. Nundah (6.9%) was the only suburb on RUN Property’s rental books in Queensland that managed a weekly rent rise of more than 6%.
Noting that property market fundamentals continue to “shine through” even in uncertain economic times, RUN Property CEO Rob Farmer said that popular suburbs close to beaches, major shopping centres or train stations “continue to go from strength to strength for investment property”.
“Our sales teams in Melbourne, Sydney and Brisbane are seeing more activity from investors now that yields are climbing,” he added.
Source: RUN Property
The news comes as the latest date from the REINSW reveals that Sydney’s vacancy rates are at their highest level since August 2006.
According to the REINSW, the vacancy rate for the Sydney metropolitan area rose by 0.3% to hit 1.9% in January – the largest single increase since July 2010.
When split into inner, middle and outer rings, Sydney’s rental vacancy rates saw the following changes last month:
Inner ring (0-10km from the CBD) rose 0.2% to 1.7%
Middle ring (10-25km), rose 0.1% to 2.1%
Outer ring (25km-plus) rose 0.4% to 1.8%
Outside of Sydney, the vacancy rate results for NSW’s key regions centres were as follows:
Newcastle rose 0.4% to 1.5%
Wollongong rose 0.2% to 2.3%
The Hunter rose 0.4% to 1.5%
The Illawarra rose 0.5% to 2.1%
But before NSW investors start running for cover, it’s worth noting that the slight easing in many of NSW’s rental markets has been put down to seasonal variations by the REINSW.
"January and February are traditionally peak periods for change in the rental market across NSW as school leavers, university students and families changing jobs or schools settle into new properties,” said REINSW President Christian Payne.
"Those looking to join the rental market or move properties from March onwards will find that availability could deteriorate sharply."
There were some unseasonal falls in the vacancy rates of some areas of the state, however, with the Central coast seeing a 0.2% drop (1.4%), the Central West seeing a 0.1% fall (1.8%) and Orana falling 0.3% (1.2%).
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