Residential rents have soared over February and vacancy rates are tightening despite surging investor activity.
Latest Domain Group data reveals that most capital cities recorded increases in house rents over the year ending February.
Hobart house rents sharply by 8.8 per cent annually followed by Sydney up 5.8 per cent, Canberra 5.3 per cent and Melbourne 5.0 percent.
Annual growth in February house rents was flat in Adelaide, Darwin and Brisbane however Perth house rents declined sharply by 7.5 per cent over the year.
Unit rents have also generally increased over the year ending February with the highest growth recorded again by Hobart with 10.3 per cent followed by Canberra up 8.9 percent, Melbourne 5.3 per cent, Sydney up 1.9 per cent and Brisbane 1.3 per cent.
Unit rents in Adelaide were flat over the year with Darwin down by 2.2 per cent and Perth again the capital city underperformer with a sharp decrease of 14.3 percent.
Reflecting competitive rental markets with rising rents, capital city vacancy rates tightened generally over February.
Although seasonal effects impacted lower vacancy rates following the end of the quieter holiday period for new tenancies, relative results clearly indicate those markets with shortages of rental accommodation.
Hobart recorded the lowest February vacancy rate for houses at just 0.6 per cent followed by Canberra 0.7 per cent, Melbourne 1.3 per cent, Adelaide 1.8 per cent, Sydney 2.0 per cent, Darwin 2.3 per cent, Brisbane 2.7 per cent and Perth 3.9 per cent.
February vacancy rates for units were generally higher than houses with Hobart and Canberra at 1.5 per cent, Melbourne 1.7 per cent, Sydney 2.0 per cent, Adelaide 2.3 per cent, Brisbane 3.3 per cent, Perth 4.2 per cent and Darwin 5.3 per cent.
Shortages of rental accommodation, particularly houses, continue to put upward pressures on rents in most capital cities.
Rents are now growing faster than incomes despite recent significant increases in investor activity and particularly in Sydney and Melbourne where surging migration is accelerating demand.
Initiatives by policymakers to reduce investor activity will certainly only add to the current upward pressure on rents and the tough and deteriorating market conditions faced by most tenants.
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