Rents on the rise as prices cool, latest data finds

The Real Estate Institute of Australia’s (REIA) Real Estate Market Facts report for the March 2018 quarter revealed weighted average median house prices declined by 0.1 of a percentage point to $770,086 and other dwellings declined by 0.2 of a percentage point to $593,183.

Malcolm Gunning, the president of the REIA, noted that median house prices rose in Hobart, Melbourne and Adelaide, but declined in Darwin, Perth, Sydney, Brisbane and Canberra, with Canberra having the largest decline in house prices and Darwin having the largest decline in other dwelling prices.

“This is the first time since September 2006 that Hobart hasn’t had the lowest house median price for all capital cities on the back of an increase of 7.2 per cent over the quarter and 20 per cent over the previous year,” Mr Gunning said.

“Adelaide now has the lowest median house price at $470,000 some 39 per cent lower than the national average.”

While these declines create a grim picture for the market, figures for the last 12 months see median house prices rising by 2.2 per cent in all capital cities except Perth and Darwin.

“Over the quarter, median rents for three-bedroom houses increased in all capital cities except Darwin. Median rents for two-bedroom other dwellings performed better, with all cities increasing their medians,” Mr Gunning said.

Meanwhile, the weighted average vacancy rate for the capital cities also declined by 2.6 per cent over the March quarter, which indicates the rental market is tightening.

“Canberra has the tightest market with a vacancy rate of 0.5 [of a percentage point], which is the lowest rate for a capital city since March 2008 and for Canberra since the early 1980s,” Mr Gunning said.

According to the report, here is how each capital city is performing:

Canberra

The median house price for Canberra declined by 3.6 per cent to $641,000 over the quarter but is up by 1.7 per cent compared to this time last year. Median house prices rose in the inner central and outer south regions by 5.5 per cent and 3.6 per cent, respectively, but declined in the inner south, west and north areas by 7.1 per cent, 0.7 of a percentage point and 0.7 of a percentage point, respectively.

Median rents for three-bedroom houses in Canberra rose to $495 per week, a rise of 2.1 per cent for the quarter and 5.9 per cent over the last year, with rents rising for two, three and four-bedroom houses in all areas, except the inner south area which held steady for three-bedroom houses and declined by 8.7 per cent for two-bedroom houses.

The vacancy rate in Canberra declined to 0.5 of a percentage point, which is a decline of 0.6 of a percentage point for the quarter.

Sydney

The median house price for Sydney declined by 2.6 per cent to $1,150,357 over the quarter and declined by 1.4 per cent over the last year. Median house prices rose in inner Sydney by 3.1 per cent but declined in middle and outer Sydney by 3.3 per cent and 3.1 per cent, respectively.

Median rents for three-bedroom houses in Sydney rose by 2.0 per cent over the quarter to $520 per week and is up 4.0 per cent for the last year. All sizes of houses either rose or remained steady in Sydney, except for three-bedroom houses in inner Sydney which declined by 1.8 per cent.

The vacancy rate in Sydney rose by 0.2 of a percentage point to 2.3 per cent for the quarter.

Darwin

The median house price for Darwin declined by 1.6 per cent to $505,000 for the quarter, which is down by 4.7 per cent over the last year. Price decreases were noticed in all areas, even up to 11.9 per cent in the inner Darwin region.

Median rents for three-bedroom houses in Darwin declined by 2.2 per cent to $447 for the quarter, down by 3.4 per cent over the last year. All sizes of houses saw declines in Darwin with the exception of four-bedroom houses which held steady.

The vacancy rate in Darwin rose by 0.2 of a percentage point to 6.5 per cent for the quarter.

Brisbane

The median house price for Brisbane declined by 2.8 per cent to $515,000 but is up by 2.0 per cent over the last year. Price decreases were noticed in all areas in Brisbane, which went up to as high as 3.2 per cent in the middle region.

Median rents for three-bedroom houses in Brisbane rose by 2.6 per cent to $390 per week for the quarter, with all areas either remaining steady or rising to as high as 2.9 per cent for three and four-bedroom houses in the inner Brisbane region.

The vacancy rate for Brisbane rose by 0.1 of a percentage point to 2.7 per cent for the quarter.

Adelaide

The median house price for Adelaide rose by 1.1 per cent to $470,000 for the quarter and is up by 2.2 per cent for the last year. Price rises were noticed in the middle region of Adelaide at 2.0 per cent but declined in the inner and outer regions at 0.6 of a percentage point and 0.3 of a percentage point, respectively.

Median rents for three-bedroom houses in Adelaide rose by 2.9 per cent to $355 per week over the quarter and is up by 1.4 per cent over the last year. Most regions saw rents increase for most house sizes, with the exception being three-bedroom houses in the inner region of Adelaide and two-bedroom houses in the middle region of Adelaide at 2.2 per cent and 7.7 per cent, respectively.

Hobart

The median house price for Tasmania rose by 7.2 per cent to $492,000 and is up by 20 per cent over the last year. Price rises were noticed in all areas, with the largest rise noticed in the middle region of Hobart. Inner Hobart was the only area to decline, which fell by 2.9 per cent.

Median rents for three-bedroom houses in Hobart rose by 5.3 per cent to $400 per week for the quarter and is up by 8.1 per cent over the last year. Most regions for all house sizes saw rents either rise or hold steady, with the exception of four-bedroom houses in the inner Hobart region which declined by 5.2 per cent.

The vacancy rate in Hobart held steady at 1.4 per cent for the quarter.

Melbourne

The median house price for Melbourne rose by 4.4 per cent to $855,000 over the quarter, up by 7.4 per cent over the last year. All regions in Melbourne recorded rises, the highest being the middle region rising by 4.3 per cent.

Median rents for three-bedroom houses in Victoria rose by 1.3 per cent to $400 per week for the quarter, up by 2.6 per cent over the last year. The majority of areas for all house sizes saw rent rises, with the exception of four-bedroom houses in inner Melbourne which declined by 0.5 of a percentage point.

The vacancy rate in Melbourne declined by 0.1 of a percentage point to 2.1 per cent over the quarter.

Perth

The median house price for Perth declined by 1.9 per cent to $510,000 for the quarter, down by 1.0 per cent over the last year. Most areas declined, except for the outer region of Perth, which rose by 0.9 of a percentage point.

Median rents for three-bedroom houses in Perth held steady at $330 per week for the quarter, down by 5.7 per cent over the last year. Looking at the areas of Perth, there was not a consistent trend, as the outer region rose by 2.9 per cent, the middle region held steady and the inner region declined by 7.1 per cent.

The vacancy rate in Perth declined by 0.6 of a percentage point to 5.1 per cent over the quarter.