Over the past year, new Domain data shows, renters in most capital cities have seen a rise in their weekly rents. Nationally, the house and unit markets saw an increase of 20 basis points in year-on-year gross rental yields. Domain research analyst Eliza Owen says most cities’ rental markets have not kept pace with a growing population, resulting in low vacancies and putting upward pressure on asking rents.
The most noticeable uplifts were recorded in Adelaide and Perth. In the past year, the median weekly rent for Adelaide’s houses are up 2.7%, with a sharper increase for units at 3.3%. Most rent increases were found in the central and hills region as well as in the south. The modest rise in rents had occurred due to a combination of slow population growth and limited investment activity, Ms. Owen said.
Further south, Melbourne rents have mostly remained steady. The median house rent remained at $430 over the year and unit rents increased by $10 over the past year to $420. Despite a similar construction boom occurring in Melbourne, rents have not dropped as they have in Sydney because of stronger population growth in the Victorian capital, according to Ms. Owen. Domain data suggests there has been a 9 percent increase in the number of rental properties over the year ending to September, she says.
Perth’s rental market had strengthened due to steady population growth and a drop-off in residential construction, Owen says. House rents have increased 5.7% in the past year, yet Perth remains the most affordable capital in which to rent a house. Rents fell in Sydney, the only capital city with a vacancy rate above 3%.
Market conditions are dictated to by changes in interest rates, unemployment and rises in the cost of living. Overall, the Australian economy and how we are financially situated as a nation will influence property buyer and seller demand. Therefore, if you’re starting out in property investment or selling a property, you need to be aware of market conditions.