Canberra's tightening rental supply leading to rate rises: Domain

Canberra’s median weekly house rent held steady at the record high of $550, which was first reached in the June quarter, according to the latest rental report from Domain.

The report found that Canberra remains the most expensive city to rent a house, along with Sydney.

House rents increased by 8.4% over the year, the second highest jump of all capital cities.

Unit rents in Canberra were flat at $450 per week, a record that has been maintained for the entire calendar year.

With an annual increase of 7.1%, Canberra achieved the second highest growth in unit rents of all capital cities year-on-year.

Domain Senior Research Analyst, Dr Nicola Powell noted: "Rental prices may not have risen further over the quarter, but Canberra has experienced one of the strongest annual growth rates of all the capital cities.

"Supply continues to tighten with house rental numbers now at a five year low and unit rental supply hitting a two-year low.

"Rising rates and investor land tax are likely weighing heavily on some investors - this could be driving some to sell, raise asking rents or opt for higher yielding options such as short-term leases.

"Canberra has seen a rise in short-term rental demand, with recent tourism data revealing overnight accommodation has risen in the past year.

"All these factors are placing additional pressure on the rental market."