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Vacancy rates are tight in most regions across the country and rents have been rapidly increasing. But there remain some capital markets where costs are below average, and the pipeline of availability suggests that supply will be stable.
A new report by PRD has analysed the rental markets across Brisbane, Sydney, Melbourne, Hobart, Adelaide and Perth, identifying the suburbs in each that could still be considered affordable with confirmed incoming ready-to-sell stock.
Though there are a number of factors influencing the cost of rentals in Australia’s current market, PRD’s chief economist, Dr Diaswati Mardiasmo confirmed that the lack of supply is the primary driver behind increasing costs causing “a state of severe stress” in the rental market.
For this reason, when embarking on a project to identify “affordable” suburbs within the country, the firm also looked to ensure that data would remain reliable, with a solid number of development projects in the pipeline. This also provides peace of mind for any potential residents, as the current conditions have been characterised by Australians frequently moving away from communities they’ve come to call home due to being priced out of the area.
The respective Australian capitals that are included come with varying degrees of difficulty in identifying places that can be considered stable for Australian renters.
Hobart, Adelaide and Perth prove to be the most challenging when identifying an affordable and liveable suburb to rent, according to the firm. New stock in these cities generally rent for very close to the average rental price, if not higher, so finding neighbourhoods with low rents and incoming homes prove to be a challenge.
Surprisingly, finding suburbs with a more affordable rental price compared to the median rent that also has a high level of confirmed residential builds is not as difficult in Sydney and Melbourne. The high level of investment in these cities mean that supply pipelines are easier to find.
And while ultimately Melbourne is one of the easiest capital cities in which to find a lower rental priced suburb with incoming stock, Brisbane proves to be the “sticky” city where confirmed ready-to-sell stock largely do not align with suburbs that have a below-average rental price.
As a result, only two of the six Brisbane suburbs identified as affordable for houses and units have more than 100 confirmed dwellings in the pipeline. Capalaba, Everton Park and Richlands are the most affordable for houses, with 111 new dwellings planned for Everton Park.
The unit market in the Sunshine State capital fares better, with Bowen Hills boasting an incoming 449 dwellings. Chermside and Coopers Plains – the other two affordable rental markets – are expecting to add 80 and 72 new dwellings, respectively.
By comparison, Melbourne’s affordable suburbs for houses, Ardeer and Burnside, have more than 300 planned dwellings. In units, the northern suburb of Broadmeadows has more than 700 homes in the pipeline. Dallas has 685 incoming, and Essendon has 302 in the works.
Sydney’s best markets for houses include Carlingford, Granville and Wiley Park, while units are incoming in Crows Nest, Summer Hill and Enfield. With the exception of Wiley Park, however, none of those neighbourhoods have more than 100 homes in the pipeline.
Perth’s best suburb for a house is deemed to be Koongamia, while a renter looking for a unit might want to search in Shenton Park. In Hobart, that’s Warrone for houses and Mount Nelson for units. Kilburn and Hope Valley are Adelaide’s most affordable and reliable suburbs for houses and units, respectively.
Dr Mardiasmo noted that the firm is not looking to identify purely the cheapest suburbs in which to find rentals, but rather the ones that might be considered the most “liveable” due to lower than average rents coupled with other key indicators.
“All suburbs have low crime rates, availability of amenities within a five-kilometre radius (i.e. schools, green spaces, public transport, shopping centres and healthcare facilities) and an unemployment rate on par or lower in comparison to the relevant state average,” the firm explained.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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