Ever wondered what amount of rent landlords are charging in other capital cities? New research has the answer.
Domain has just released its latest Rental Report, examining the September 2019 quarter to determine what’s happened to house and unit rents in each capital city over the past three months.
The following, derived from the report, represents the median house and unit rent charged per week in each capital city.
The above represents a 0.9 of a percentage point decline for houses over the quarter, and a 1.0 per cent decline for units. The research showed Sydney unit rents are at the lowest point since the December 2016 quarter.
“The Sydney market is adjusting to an overhang of rental property supply from the investment boom between 2013 and 2017. This corresponds with Sydney’s rental vacancy rate being the second highest of all capital cities,” the Domain report noted.
“Nonetheless, Sydney remains expensive for renters. Sydney is the second most expensive capital to rent a typical house and the most expensive capital to rent a unit.
“Despite falls in median asking rents, rent yields improved due to significant property price falls over the past year. September quarter rental yields were 3.4 per cent for houses and 4.1 per cent for units. However, this trend of rising yields is likely to turn, as prices rise and interest rates fall. The Sydney property market is moving into an upswing, with sale prices rebounding in recent months.”
Both house and unit rents remain unchanged over the quarter, much like the rest of the 2019 calendar year.
“Despite experiencing a similar dwelling construction boom to Sydney in recent years, the Melbourne rental market has not swung in favour of tenants to the same extent. This is likely due to Melbourne maintaining stronger population growth,” the Domain report said.
“This strong population growth also means demand for rentals has matched increased supply. There has been an 8.5 per cent increase in the volume of rental listings over the September quarter according to Domain data, but email inquiry per listing has remained unchanged.
“Rental yields rose for both houses and units over the past year, with rents remaining steady but property prices falling.”
The report showed median rent for houses increased 1.3 per cent over the quarter, but remained unchanged for units.
“Brisbane median asking rents rose over the year, as the rental vacancy rate fell, but Brisbane remains one of the most affordable capital city rental markets in the country,” Domain said.
“Greater Brisbane unit rents have remained relatively steady over the past few years, despite high levels of apartment development across the city. Unit rental yields rose from 5.1 per cent to 5.4 per cent over the past year.
“The rental vacancy rate declined from 2.6 per cent to 2.2 per cent over the past 12 months.”
House rents were unchanged over the quarter, while units rose 1.6 per cent, according to Domain.
“Despite rents increasing steadily across houses and units, yield performance has been different across the two housing types in recent years,” the report said.
“Stagnant prices, and rising rental prices, has seen the median rental yield for units rise 7 basis points over the year, to 5.3 per cent. Meanwhile, Adelaide house yields have trended down 30 basis points from a peak in 2014, to 4.5 per cent.
“The relatively modest rise in rents in Adelaide over time is due to a combination of slow population growth alongside limited investment activity.”
House rents increased by 1.4 per cent and units remained unchanged over the September quarter.
“Perth has seen the second steepest annual decline in the rental vacancy rate behind Darwin. The rental vacancy rate fell by 70 basis points to 2.7 per cent in September 2019,” Domain said.
“These figures point to a tighter Perth rental market. While this is not good news for renters, it may be a sign of a broader turnaround in the Perth property market.
“Stronger population growth, combined with a slowdown in new housing construction, is seeing vacant properties being slowly absorbed. The WA economy is also rebounding, driven by improving conditions in the mining sector.”
Median rent for houses in Hobart remain unchanged in the September quarter, while median rent for units in the city increased by 3.9 per cent.
“Rent prices in Hobart had the steepest year-on-year increase of the capital city markets,” according to Domain, who noted that house rents rose 9.8 per cent, or $40 year-on-year, though remained steady over the quarter. Meanwhile, unit rents rose 12.9 per cent, or $45 year-on-year, and 3.9 per cent over the quarter.
“These rental increases are brought about by high levels of demand, against limited rental stock,” Domain said.
“This is similarly reflected in the rental vacancy rate, which was just 0.5 [of a percentage point] in September 2019. This is the lowest vacancy of the capital city markets, and represents an estimated 120 available, vacant rentals in Greater Hobart at the end of the quarter.
“Given that annual wages growth in Tasmania was just 2.4 per cent in the year to June, local residents will be feeling the sting of these rent increases, and may find themselves priced out of the city.”
Median rents for both houses and units in Canberra remain unchanged over the September quarter.
“Canberra house rents were also unchanged year-on-year, but unit rents were up 4.4 per cent in the same period. Based on median asking rents, Canberra remains the most expensive city to rent a house,” the Domain report said.
“Over the past year, house and unit rents increased the most in Belconnen, but fell modestly in Woden Valley.
“Canberra units maintained the second-highest rental yields of the capital cities. In the September quarter, the unit rental yield was 6.1 per cent, up from 5.9 per cent one year ago. House rental yields were 4.4 per cent in the September quarter.”
Median rents for houses in Darwin increased by 1.0 per cent over the September quarter, however fell in units by 1.3 per cent.
“The Darwin rental market has demonstrated the most significant boom-and-bust pattern of the capital cities, with house rents peaking at $700 per week between 2013–14, and units peaking at $570 over the same period,” the Domain report said.
“With a highly mobile, project-based workforce, the Darwin rental market remains volatile relative to other capital cities.”
Emma Ryan is the deputy head of editorial at Momentum Media.
Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.
Email Emma on: [email protected]