Property investors looking for an immediate return on their investment are flocking to the eastern suburbs of Sydney where house rents are soaring.
According to figures from RP Data, Rose Bay in Sydney recorded the greatest annual growth in house rents, with a 58.3 per cent increase.
Over the 12 months, median weekly advertised rents in the suburb increased from $600/week to $850/week.
A top five list of areas with best rental growth compiled by rpdata.com research analyst Cameron Kusher showed a fairly even split between high and low priced suburbs making the list with many New South Wales, Victorian and Western Australian suburbs having higher price tags whilst other states recording a mixture of higher and lower priced stock.
Mr Kusher today said that it’s not surprising to find in the analysis that the best performing suburbs tended to be in the capital city cities.
For the unit market, West End in Brisbane achieved the greatest jump in median weekly advertised rents, increasing by 39.4 per cent from $330/week to $460/week.
The vast majority of suburbs with the greatest annual growth in rents for units, have witnessed this growth across lower priced stock with the only exception being Western Australia.
Over the 12 months to September 2009 weekly rents for houses nationally have increased by 3.4 per cent and units have witnessed a slightly greater rate of growth at 4.1 per cent.
Mr Kusher said that compared to recent years, these results reflected a slower rate of growth. In most areas, rents have actually shown modest falls in recent months as value growth has returned to the market and rental growth has failed to keep pace.
He said that first home buyer activity has eased some of the pressure on the rental market as renters became first home buyers.
“With the First Home Buyers Grant Boost being wound back and mortgage rates rising, we anticipate that more people will be forced to remain in the rental market,” Mr Kusher said.
“Ultimately, the impact is likely to be that rental rates will once again start to climb, especially given that nationwide our annual new dwelling requirement continues to go unfulfilled.”