Rental Market Breaks Multiple Records

Rental Market Breaks Multiple Records

Rental prices across Australia hit new highs, clocking the fastest annual growth in 11 years to be up 7.4 per cent.

Houses and larger apartments were the biggest drawcard for tenants, reflecting changing requirements as people continue to work from home.

The Domain quarterly rent report also revealed Melbourne was the cheapest place to rent a unit or house in the country.

Canberra retained its position as the most expensive city to rent while Brisbane continued to move up the ranks, after overtaking Melbourne in March 2021 and reporting the strongest annual growth for houses.

Despite a quarterly increase of 3.4 per cent across all markets, rental yields were at a record low of 3.45 per cent for units and close to record low of 3.96 per cent for houses, as purchasing prices increased faster than rents.

Weekly asking rent for houses

LocationDec 21 PriceQuarterly changeAnnual changeDec 21 Yield

^Source: Domain quarterly rent report

Domain chief of economics Nicola Powell said there was also a record difference between combined capitals house rents at $499 and unit rents at $436.

“House rents are racing past unit rent growth as the increase in demand and competition for larger spaces has resulted in landlords hiking up asking house rent prices three times faster than units during the past year,” Powell said.

“In some cities, units with more bedrooms also continue to have rent price growth—this reflects the desirability for space from those able to work from home, but also provides an insight into demand demographics.”

Weekly asking rent for apartments

LocationDec 21 priceQuarterly changeAnnual changeDec 21 Yield

^Source: Domain quarterly rent report

Cities with high rental growth also had lower vacancy rates, with Adelaide at 0.4 per cent, Hobart at 0.3 per cent, Perth at 0.6 per cent and Brisbane and Darwin at 1.3 per cent.

This compared to Sydney at 2.6 per cent and Melbourne at 3.2 per cent, which were hindered by poor net international migration and is forecast to remain subdued until next financial year.

Source:  Renee Mckeown Article – Urban Developer 13.1.22