Rents are rising in Sydney and Melbourne as buying becomes less affordable and tenant numbers continue to swell according to Fairfax owned Australian Property Monitors.
As buying becomes less affordable, more people are forced to remain renters, particularly those wanting to live close to the CBDs.
Rising rents in Sydney and Melbourne reflect population growth and the surge in residential property sales with median asking rent for units in Sydney hit $500 for the first time and house rents recorded growth for the first time since 2012 in the June quarter.
But in the cities lacking market buoyancy, such as Darwin and Canberra, asking rents have fallen
But rent increases may not continue
A record number of apartments has been approved for Sydney and Melbourne in the past year, which is expected to reduce pressure in the rental market.
However, most are under construction or yet to be built and will take time to meet pent-up rental demand.
Apartments more affordable
Apartments are considered the more affordable option over homes for both buying and leasing.
But strong tenant demand has underpinned consistent rent rises for units in Sydney and Melbourne, outpacing asking rents for houses.
“In Sydney, record levels of investor activity have failed to translate into falling rents from oversupply, indicating that the local investor market remains sustainable at this stage,”
Read more at the Australian Financial Review
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