Record high rents set to keep rising
Rents in most capital cities remained at all-time highs over the March quarter, despite increased supply from investors and developers.
The Domain Group Rental Report revealed that national median weekly asking rents for houses increased by 0.8 per cent over the March quarter, while unit rents rose 0.4 per cent.
Domain Group senior economist Dr Andrew Wilson said rising rents are set to continue through 2015 in most capitals, with the exception of Perth and Darwin.
“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,” Dr Wilson said.
He added that there is no doubt the housing rental market in most capital cities remains a tight environment for renters.
“I am sure property managers would have a good sense of the level of demand for rental properties from their enquiry rates and inspection rates.
“[However], I do think the underlying trend is for higher rents, given the driving factors.”
Dr Wilson said this does not always mean there is a “blue-sky opportunity” to keep pushing rents up.
Sydney is a prime example of this, with rents hitting an affordability barrier and staying at a $500 median for more than a year.
“However, that has now been reinvigorated as incomes have grown and we are seeing rents rise again in Sydney,” he said.
According to the Domain report, Sydney recorded the biggest jump in rents during the year, with the median rent jumping 4.0 per cent to $520.
Hobart was next, increasing 6.5 per cent to $330, followed by Melbourne with a 2.6 per cent jump to $390.
Brisbane ($400), Adelaide ($350) and Canberra ($450) remained unchanged from the previous year.
Darwin recorded the largest decrease in rents over the year, with the median rent dropping 7.1 per cent to $650.
Perth was the only other capital city to record a decrease in median rent, falling 5.3 per cent to $450.