Houses located in Sydney’s eastern suburbs are providing investors with the greatest bang for their buck, new research has revealed.
New statistics from RP Data found houses in the Sydney suburb of Woollahra recorded an increase in advertised rents of 22.2 per cent over the year.
Sydney regions dominated RP Data's top rental performance list and accounted for 23 of the 35 best performing capital city rental regions over 2010.
In contrast, the Perth council area, which is essentially the inner city region of Perth, recorded the greatest fall in median advertised rents over the last year.
Median house rents fell from $650/week to $510/week, a fall of 21.5 per cent over the year.
Overall, Perth dominated the list of weakest performers, accounting for 20 of the 35 weakest performing capital city markets for rents.
RP Data’s research analyst Cameron Kusher said while Perth rental rates had dropped in the last year, this was not a trend that he expects to continue over the longer term.
“With tight rental vacancies and ongoing demand for rental accommodation, we expect that weekly rents will increase in most capital cities,” he said.
“Although there was a surge in building approvals last year, in many instances this new supply won’t actually get to the market during 2011. Added to that are the strict bank lending criteria which now require significant pre-commitment of sales within new developments. Because of this we are seeing fewer new high density developments taking place in inner city areas. These regions are particularly attractive for renters as they provide significant levels of amenity. With less new supply in most capital cities it is likely to create greater competition for available stock.”
The top five best performing rental suburbs are Woollahra and Burwood in Sydney, Sorell in Hobart and Claremont and the Nedlands in Perth.