Australian rental rates have surged across the nation, with the country recording 3.2 per cent growth during the March quarter in what is the fastest pace of growth in 14 years, new figures reveal.
Every single capital city, as well as regional areas, recorded positive growth in rent for 2021 so far, new CoreLogic figures reveal.
Rent prices rose the fastest in Perth and Darwin, at 7.7 per cent and 5.9 per cent respectively over the first three months of the year.
But while growth has been positive across the board, research director Tim Lawless indicated the growth was uneven, with rents in combined regional areas rising faster than combined capitals (4.1 per cent compared to 2.9 per cent in the March quarter).
“While housing rents are rising at the fastest pace since 2007, the headline reading hides the sheer diversity of rental conditions around the country,” Lawless said.
“At one end of the spectrum we have Perth and Darwin where annual rental growth is well into double digits and accelerating. At the other end is Melbourne and Sydney where rents are down over the year.”
Rental rates in Australia’s largest capital cities fell during the pandemic amid high supply and a drop in demand as the international travel ban barred international workers and students from entering the country.
Unfortunately, rental rates in Sydney and Melbourne seem unlikely to bounce back until international students and visitors are allowed back into the country, as they are a key group driving rental demand, Lawless said.
Median rent rates: City by city
The most expensive city in the country to rent in is Canberra, with median rent at $612, followed by Sydney at $570.
On the other end of the spectrum, Adelaide is the cheapest place to rent, at $419, with Melbourne not far behind, at $443.
“The exceptions are Perth and Darwin where rents have risen at a faster pace than housing values, driving a rise in yields,” he added.
“Outside of Sydney and Melbourne, with mortgage rates so low, yields are generally high enough to provide investors with positive cash flow opportunities from the outset.”
‘Two-speed property market’
The divergence in the rapid rise of house prices versus the fall in apartment prices has been dubbed by some commentators as the ‘two-speed property market’.