The Australian Property Monitors’ Rental Price Series Quarterly Report has revealed rental markets in capital cities are rebalancing.
Nationally, median weekly asking rents for houses increased marginally by 0.9 per cent, with unit rents down by 0.4 per cent.
Sydney has remained the most expensive capital city for tenants. Although house rents remained flat, unit rents increased by 5.4 per cent over the year, driven by demand for inner-city, low maintenance and more affordable apartment living. Over the December quarter, the median weekly asking rent was $500 for houses and $485 for units.
Despite rents for houses and units increasing over the December quarter by 2.9 per cent and 1.8 per cent respectively, Adelaide was still the most affordable of all the mainland capitals. The current median weekly asking rent was $350 for houses and $285 for units.
With mixed results, the Melbourne market remained relatively affordable for tenants. Median asking rents for houses in Melbourne increased by 1.4 per cent, while unit rents continued to weaken.
For landlords, Melbourne and Sydney were delivering the lowest yields for both houses and units.
“After an extended period of negative growth, house rents in Melbourne are on the climb again. However, unit rents are still in decline due to an increased supply of inner-city apartments,” said Dr Andrew Wilson, senior economist at Australian Property Monitors.
“Rental yields for houses in Sydney continue to weaken as a result of strong price rises and a surge in investor activity,” said Dr Wilson. “This year, we can expect to see rising supply and moderating demand put further downward pressure on house rental growth in the city.”
Meanwhile, Brisbane and Perth provided investors with the highest yields for houses and units.
Brisbane, Hobart, Darwin and Adelaide all saw growth in both house and unit rents over the December quarter.
Perth house rents were flat, while unit rents fell sharply by 4.8 per cent as the market rebalances after unsustainably strong growth in the first half of 2013.
Canberra saw a 2.5 per cent increase in unit rents, while house rents decreased by 1.1 per cent over the quarter.