By Terry Ryder, 11th October 2012
Exceptional rental growth in Perth and Darwin, and strong movement in the Sydney market, are the highlights of the latest Rental Report from Australian Property Monitors.
In Darwin the median weekly rent for houses rose 7.7% in the September Quarter, providing annual growth of 27%. Darwin has by far the highest median house rent - $700 per week – among the state and territory capital cities.
Darwin also has the highest apartment rents. The median unit rent rose 10.4% in the September Quarter to reach $530 per week. The annual growth rate in Darwin unit rents is 15%.
APM’s senior economist Dr Andrew Wilson says Darwin’s upturn reflects the impacts of an underlying shortage of housing and the transient nature of the workforce. (click here to access our Darwin location report http://www.hotspotting.com.au/report/154-darwin)
The only challenger to this extraordinary performance is Perth, where house rents are up 15% and apartments rents 11% on last year, as resources-related demand continues to exceed the supply of rental properties.
Further evidence of a market upturn in Sydney comes from the 4% growth in house rents in the September quarter. The median for Sydney is now $520 per week, with the median for units $470 per week.
Brisbane, Adelaide and Canberra also have higher house rents than a year ago, while Brisbane has also seen small growth in unit rents, according to the APM report.
Nationally, median rents for houses rose over the quarter 1.6%, while units rose 0.2%.
Canberra, the third most expensive city for renting, recorded a surprising fall in both house (-1.0%) and unit (-2.3%) rental prices in the September Quarter, which Wilson says can be attributed to increased buyer activity, providing less competition for rental properties.
“Rental markets will continue to produce varied outcomes reflecting the underlying drivers of each capital city,” said Wilson.
“In Sydney, Perth and Darwin, pressure on rents will continue as declining affordability impacts on first home buyers’ borrowing capacity with housing shortages and population increases combining to keep vacancy rates tight.
“For other markets, such as Melbourne, subdued housing market conditions, higher vacancy rates and less competition for available properties should see rental prices remain steady over the shorter-term.”
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