Stacey Moseley and Simon Parker
Demand for rental properties has pushed rents higher once again, new data has revealed.
According to the latest statistics from Australian Property Monitors (APM), house and unit rentals have resumed upward growth after flat results over the previous two quarters.
National median weekly asking rents for houses rose by 1.1 per cent in the December quarter, with rents for units rising by 1.4 per cent.
Most capital cities recorded house rental rises over the quarter with Canberra up by 6.4 per cent, Brisbane up 2.7 per cent, Perth up 2.6, Adelaide up 1.5 per cent and Sydney up 1.0 per cent.
Melbourne, Darwin and Hobart however recorded flat results with no increases in median asking weekly house rentals over the December quarter.
Speaking about the results, Australian Property Monitors senior economist Andrew Wilson said the Sydney, Perth and Canberra rental markets have been characterised by chronically low vacancy rates and, with ongoing low levels of new construction, this situation is expected to continue with upward pressure on rentals.
"The Brisbane rental market also remains highly competitive for tenants reflecting ongoing consequences of the devastating floods of early 2011 and the slow progress of reconstruction," he said.
"Melbourne continues to be Australia's most tenant-friendly rental market with a wider choice of properties courtesy of nation-leading dwelling construction and no growth in rentals for both units and houses over the December quarter.
"By contrast house rentals in Canberra rose by 6.4 per cent over the year with Perth up by 5.3 per cent, Sydney up 4.2 per cent and Brisbane up by 2.7 per cent."
Sue Mortimer, property manager at LJ Hooker Belconnen, in the ACT, said her agency reviewed rents every 12 months, which was important in a Canberra rental market that had always been strong.
"As long as I’ve been in the industry in Canberra, prices have always gone up," she told Real Estate Business.
"Canberra has its own economy. We are sort of cushioned in a way, as we are based on public servants...it is like a false economy. The tenants just pay the money."
"Legally we are only allowed to increase every 12 months," she continued. "We do a comparative market analysis with each and every property we manage and determine the worth."
"We compare our properties with other properties in the ACT. [We compare] like with like - we don’t get a four bedroom home and compare with a three bedroom. They must be in the same area."
She said they would normally print out of property analysis eight weeks before the 12 month mark, and show the owner the property is due for an increase, as the market is indicating. The tenants must then have eight weeks notice.
"Some owners are to keep the price the same, especially if they have good tenants," she said. "Generally speaking, owners will say yes and you are looking at a five per cent, if not more, increase. However this always changes depending on the amount of property on market. It would be silly to put the price up and lose a tenant to the market."
While rental demand was high in Sydney, Canberra, Perth and Brisbane last quarter, Mr Wilson said he expected demand and price growth to peak in 2012.
"Peaking housing affordability as the price cycle bottoms out, combined with a strengthening economy will facilitate increased buyer activity in Sydney, Perth, Brisbane, Canberra and Darwin through 2012 that will take some pressure off the rental markets in these capitals," he said.