Weekly rents haven’t moved a great deal across the capital cities, but there are key regions around the country where rents are racing ahead.
Last month, RP Data released its Quarterly Rental Report for March 2014 which showed that rental growth has been fairly benign over the past year.
The report showed that advertised rental rates for capital city houses were $430/week and $410/week for units.
Over the past 12 months, combined capital city house rents increased by 2.4% and unit rental rates are 2.5% higher. When you consider that annual inflation is recorded at 2.9%, there has been no ‘real’ change to rental rates over the year.[sam id=43 codes=’true’]
Across the individual capital cities, annual rental growth for houses has been greatest in Melbourne (2.7%) and Sydney (2.0%) and for units the strongest level of growth has been recorded in Darwin (5.8%) and Sydney (4.3%).
Looking at the 20 capital city council regions which have recorded the greatest annual rise in house rents, the list is dominated by Sydney regions.
13 of the top 20 regions listed for houses are situated in Sydney with 2 each in Adelaide and Perth and 1 each in Melbourne, Brisbane and Darwin.
The municipality of Burwood has recorded the greatest annual increase in capital city rents at 12.7%, one of only two council regions nationally where median rents have risen by more than 10% over the past year.
Generally, house rents have recorded the greatest annual rise within the middle ring suburbs, with median rents showing a premium compared with the city-wide median price.
Focussing on the unit market, the growth in advertised rents has been marginally higher across the combined capital cities than that for houses.
Across the top 20 capital city council regions we see a dominance of Sydney areas. There were 10 Sydney regions amongst the best capital city rental growth performers over the year.
Elsewhere, there were 4 Melbourne regions, 3 Perth regions, 2 Adelaide council regions and 1 Darwin region on the list.Again rental growth has generally been quite moderate across the capital city unit market with the Yarra Ranges recording the greatest annual rise of 10.0%.
As with houses, it has generally been middle-ring and outer unit markets which have recorded the greatest annual increases over the past year.
Overall we can see that rental growth is currently quite moderate with the strongest conditions typically experienced in middle-ring areas.
With sales volumes lifting and new housing supply surging, rental market pressures are likely to continue to be fairly moderate over the coming year.
As a result we’d expect that capital growth will generally continue to outpace rental growth and as a result rental yields are likely to soften across most markets over the next year.