The latest data on residential rents from SQM Research provides further evidence that markets are stronger in the smaller capital cities and in regional Australia than they are in the big cities.
This isn’t surprising because vacancy rates are quite high in Sydney and Melbourne, but they’re very low in the other capital cities and in particular in many parts of regional Australia.
All of that is reflected in the data on rents from SQM Research. In annual terms, the national average situation is a 4.3% rise in house rents and a 2.5% rise in apartment rents.
But for the capital cities, the average situation is a 2.4% annual fall in house rents and a 5.2% fall in apartment rents.
And in the past month, nationally there’s been a 1.5% rise in house rents and a 2.2% rise in apartment rents, but for the capital cities rents have fallen in the past month 1.1% for houses and 1.2% for apartments.
So why is that? Because rents overall are down in Sydney and Melbourne, especially Sydney which has the highest vacancy rates in capital city Australia. Sydney rents are down 7% in annual terms.
If you removed those two biggest cities from the equation, the overall situation for the six other capital cities would be rising rentals.
In annual terms, Perth rents for houses have risen 7.4% while apartments are up 5.4%. And there have been significant rises in the past month as well. In Canberra, house rents have increased 6.6% in the past year, while apartments are up 3%. The SQM figures also show rising rents in Adelaide.