Multi-speed rental markets have delivered a mixed bag of capital city results over the June quarter.
While rents increased in Sydney and Melbourne, they either stayed flat or fell in other capital cities, according to APM’s latest Rental Price Series Quarterly Report
In Sydney, house rents went up for the first time since 2012. The median asking rent increased by 2.0% to $510 per week. Unit rents also increased by 2.0% to reach a new peak of $500 per week.
In Melbourne, unit rents increased by 1.4% to a median of $370 per week, while median asking house rents remained flat at $380 per week.
Rental growth in all other capital cities remained subdued, if it occurred at all:
- Hobart actually recorded strong growth of 4% in unit rents, but its median asking house rents did not budge.
- In Brisbane, the median asking house rent remained flat, while unit rents fell.
- The reverse was true for Perth and Adelaide – unit rents remained flat and the median asking house rents fell.
- Darwin and Canberra both recorded decreases in both house and unit rents.
APM senior economist Andrew Wilson said that demand for rental properties in Sydney and Melbourne saw their rental markets strengthen over the quarter.
Record levels of investor activity in Sydney have not led to falling rents from oversupply, which indicated the local investor market was sustainable at this stage, he noted.
“Signs of increased demand for rentals in Melbourne may reflect the low number of first home buyers in the local market and strong population growth.”
While the rise in Sydney and Melbourne rents might sound like good news for investors, in fact rental yields, for both units and houses, in the two cities remained the lowest of all the capitals.
Wilson said that rental yields for houses and units had fallen in most capital cities, which reflected the impact of prices growth.
Of the mainland capital cities, Brisbane had the highest rental yields for houses, while Adelaide had the highest yields for units.
The report also showed that, nationally, rental growth for units has outperformed that of houses in most capital cities.
Over the June quarter, the median asking rent for units went up by 1.1%, while over the last 12 months it went up by 3.0%.
But the median asking rent for houses decreased by 0.3% over the June quarter, which contributed to an annual growth rate of 1.5%.
Wilson said that this reflected affordability barriers as well as the growing popularity of apartment living.
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