Tight rental markets heat up

Tight rental markets heat up

Posted on Thursday, January 17 2013 at 11:09 AM

Capital cities where demand for rental properties remains the strongest saw strong price growth once again in the December quarter.

At a national level, median asking rents
for houses rose slightly by 0.8 per cent while units saw a modest lift of 0.2
per cent.

The biggest increase was seen in Perth,
where the cost of renting a house rose 4.4 per cent to $470 per week and unit
rents jumped 2.6 per cent to $400 per week.

That impressive result is mostly thanks to
an influx of new arrivals in recent times, putting pressure on an already
limited rental market, Australian Property Monitors senior economist Andrew
Wilson says.

Asking unit rents in Sydney rose 2.2 per
cent to $460 per week in the three months to year-end. House rents remained
steady at $500 per week.

Wilson says underlying demand in the New
South Wales capital remains strong, driven by a chronic shortage of new housing

Brisbane saw a 2.6 per cent lift in house
rents to $390 per week, while units experienced a 1.4 per cent gain to $375 per

Competition for accommodation in southeast
Queensland is on the rise, with the vacancy rate in Brisbane continuing to

“The upward pressure on rents is set to continue in
markets such as Perth, Brisbane and Darwin with Sydney also set to resume
rental growth in 2013 for both houses and units,” Wilson says.

Melbourne’s rental market looks to have
stagnated over 2012, with asking rents for both houses and units showing no
movement in the December quarter.

“Melbourne will continue to provide the best value for
tenants with rents to remain stable or even decline over 2013,” he says.

Gross yields for houses were up in every
capital city with the exception of Sydney, Melbourne and Darwin, which recorded
slight dips into negative territory.

The yield story is more positive for units,
with every city experiencing growth in the quarter except Canberra and Hobart.

“Brisbane and Perth are providing investors
with the best gross rental yields for houses, each with 5.27 per cent reported
over the December quarter,” Wilson says. “Perth also has the highest gross
rental yields for units of the major capitals at 5.77 per cent, reflecting the
recent surge in rental growth.”

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