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Record-high rents set to keep rising

Record-high rents set to keep rising

by Elyse Perrau 2 comments

Property managers who want to push for rental increases might be heartened by new forecasts that show the market tipping further in landlords’ favour.

The Domain Group Rental Report revealed rents in most capital cities have remained at all-time highs over the March quarter, despite increased supply from investors and developers.

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 told Residential Property Manager 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,” he said.

Mr Wilson said there is no doubt that 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,” he said.

“[However], I do think the underlying trend is for higher rents, given the driving factors.”

Mr Wilson said it doesn’t always mean there is a “blue sky opportunity” to keep pushing rents up.

He said Sydney was a prime example of this, with rents hitting an affordability barrier and staying at a $500 median for over a year.

“However, that has now been reinvigorated as incomes have grown and we are seeing rents rise again in Sydney.”

According to the Domain report, Sydney recorded the biggest jump in rents over 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.

[Related: National vacancy rate to rise in 2015]

 

Record-high rents set to keep rising
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