Rents rocketing in Melbourne's eastern suburbs

Three eastern Melbourne suburbs – Glen Iris, Armadale and Kew – achieved rental growth in excess of 10% in the last quarter, according to the latest quarterly market report compiled by RUN Property.

Kew registered the biggest increase in absolute terms, with rents rising by $52 a week over the 12 months from June 2010 to June 2011 to $567.

Glen Iris rents increased by $35 per week to $375, while Armadale rents increased by $37 per week to just under $400.

Inner-city rental increases were led by Glebe in Sydney’s inner west.

Tenants taking out new leases in June 2011 in Glebe are now paying on average $585 per week compared, with $523 a year ago, an increase of $62.

Despite the 11.8% increase in rental income generated over the year, Glebe failed to make onto the Top 100 investment hot spots lists of either Australian Property Investor or Your Investment Property.

Neutral Bay on Sydney’s inner North shore recorded the biggest percentage increase of 12.1%, with rents increasing by $53 over the period from $440 to $493.

In total, eight Sydney suburbs recorded rental increase of above 10% for the year: Kogarah, Randwick, Potts Point, Redfern, Surry Hills and Chippendale.

Nundah is Brisbane’s rental hotspot, achieving growth of 5.9% over the year to June 2011. Rents in the suburb, which is about eight kilometres north east of the CBD, have increased by $17 over the past year to just over $300 per week.

The rent increases relate only to new tenancy agreements.

RUN Property chief executive Rob Farmer says rising rents will boost the confidence of investors and encourage more to buy, especially during the property market’s quieter winter months.

“Rental growth has been strong and consistent over the past 18 months, so it surprises me that more investors are not taking advantage of the dip in sales activity to secure their next bargain investment,” he says. 

RUN Property manages 18,000 properties throughout Melbourne, Sydney and Brisbane.