Rents are expected to climb throughout the year, new research has found.
According to Australian Property Monitors’ Rental Price Series Quarterly Report, unit rental prices rose by 2.3 per cent throughout the March quarter, reflecting high demand in most of the capital cities.
In Sydney, median asking rents for houses rose 1.0 per cent to $485, while units jumped 2.3 per cent to $450 per week, ensuring Sydney remains one of the most expensive places to rent in the country.
Adelaide, Perth and Canberra also recorded growth in house rental prices, with Adelaide and Canberra leading the pack with increases of 3.0 and 2.2 per cent respectively.
However it was in units that asking rents performed most strongly, rising in each capital city with the exception of the Brisbane and Hobart markets which remained flat for the quarter.
In particular, demand for units in Darwin, Canberra and Melbourne has seen prices rise above the national trend.
Despite expectations of house and unit supply shortages in Brisbane due to the recent weather events, this has not yet been reflected in prices.
“Renters should prepare for significant growth in rental prices throughout 2011, driven by accelerating economic activity, housing shortages and a depressed first homebuyer market,” APM’s senior economist Andrew Wilson said.
“Units in particular have seen a major shift in demand, with chronically low vacancy rates for inner-city residences in most capitals intensifying competition amongst prospective tenants for available properties.
“However it is expected that rising rental yields will renew investor interest in the market and may provide some relief for renters in the longer-term.”