Rents for units in Sydney have surged over the June quarter as demand continues to increase for apartment style living over the typically more expensive housing option.
According to Australian Property Monitors (APM) the median weekly asking rental for Sydney units rose by +4.4% over the quarter to $470. Unit rents in Sydney are now approaching those for houses, currently at $500 a week after a flat quarter and largely flat over the previous year.
Increasing demand by tenants for Sydney apartments reflects growing interest for this type of accommodation that typically is located closer to the CBD and provides more established urban infrastructure. Sydney’s rental market remains highly competitive for prospective tenants with low vacancy rates being recorded in most areas.
By contrast rental growth in Melbourne and Brisbane has remained flat over the June quarter, with Brisbane unit rents falling by -1.4%.
Brisbane’s current median weekly asking rents at $380 for houses and $360 for units are higher than those in Melbourne at $360 for houses and $350 for units.
According to APM Melbourne remains the most “tenant friendly” market of all the mainland capitals with rental growth for both houses and units having been subdued for some time. With comparatively high vacancy rates in most areas and a glut of new apartments in the pipeline and a slew of vacant properties in the outer suburbs as over zealous builders delivered too many new house and land packages, this is expected to continue.
There is also concern of a looming oversupply of apartments in the inner-Brisbane market, where there are more than 40 projects in various stages of development.
In Perth, median weekly asking rentals have risen markedly over the June quarter with house rents up by +7.5% to $430 and unit rents up by +8.6% to $380.
These rises will likely continue with Western Australia’s population set to grow by over 3% in 2012 placing upward price pressure on a Perth rental market already characterised by a shortage of accommodation.
Other capital city markets have largely recorded benign results over the June quarter although Adelaide house rents rose by +1.2% over the quarter to $340, while Canberra unit rents rose by +2.3% to $440.
Canberra continues to track Sydney’s rental growth indicating a tight rental market with similar high rents.
Although Darwin recorded significant rental growth for both units and houses over the June quarter, much of this can be attributed to seasonal effects that are characterised by extreme quarterly fluctuations typical of this market.
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