Canberra median unit rent hits record high: Colliers

Median apartment rents in Canberra reached record levels during 2011, according to new research by Colliers International.

The median rent for a two-bedroom apartment hit $440, the highest rent to date for Canberra.

“This is great news for anyone who owns a rental property or is thinking about investing in any of the great medium-density developments that will be coming onto the market in 2012,” says Colliers International state chief executive Paul Powderly.

He put the increase down to the low vacancy rates of just 1.6%, the second lowest in Australia. The national average is 3%.

“Canberra is fortunate to have low unemployment, high average weekly earnings and a growing population, and these factors have contributed to the rise in rental returns.”

He says this is also affecting property prices in Canberra.

“The latest RP Data-Rismark data shows we were the only market to record an increase in home values in October, and unit values rose 8.3% during the month, compared to a 0.7% lift in house values.”

Powderly says pundits are predicting that November’s interest rate cut will lead to an even greater increase in activity in the property market next year.

From January to September 2011, 67% of dwelling approvals were for medium-density dwellings.

In November Property Observer reported that units represented 44% of the Canberra real estate market.

Between 2012 and 2014 potentially 2,600 new apartments will be released in the inner north and south, according to the report, but Powderly does not expect an oversupply.

“Based on the figures released this week I expect there will be strong investor and owner-occupier demand for these new properties.”

“The other safety net is that developers have to obtain high levels of pre-commitments in order to secure financing, so these projects will only go ahead if there is a demonstrated market for them.”