Adelaide's residential rental market remained tight during the first three months of the quarter, with rents rising for both units and houses, according to the latest market update from Domain.

Over the quarter, unit rents grew faster than houses. Weekly unit rents grew by 1.6% to $320 while rents for houses increased by 1.3% to $395. On an annual basis, the difference between the gains of the two property types was more apparent, with units recording a 3.2% increase and houses hitting 1.3%.

Despite these gains in rent, Adelaide remained the second most affordable market for houses next to Perth. The South Australian capital also has the cheapest rents for units.

Nicola Powell, senior research analyst at Domain, said the city has one of the lowest vacancy rates in Australia, indicating a tight rental market. 

Also read: Vacancy Rates Still Stable

"Landlords have had greater grounds to raise rents as vacancy rates in the South Australian capital have been tightening, with demand outstripping available rentals," she said.

Recent figures from SQM Research show that over the month of March, Adelaide's vacancy rate was at 0.9%, the second lowest amongst all state capitals. The city is amongst those who reported minor declines in vacancy rates despite the uncertainty in the economy due to the COVID-19 outbreak.

"This is despite weak population growth and a soft employment sector, suggesting new construction and investor activity hasn't been enough to keep pace with demand," Powell said.

Over the second half of the month, new rental listings increased, which was probably due to short-term rental properties being transferred to the longer-term rental market.

"If this continues it could help to alleviate rent rises and provide greater choice for tenants," Powell said.