Sydney and Perth rents hit record highs: APM

Rents in Sydney and Perth have hit record highs after median rents skyrocketed over the quarter in both cities, according to Australian Property Monitors' quarterly rental report.

In Sydney house rents grew 4% over the quarter to a record $520 per week for houses and Perth house rents grew 4.7% to a record $450 per week.

In Sydney unit rents are unchanged over the quarter, but they recorded strong growth the previous quarter.

The rises place Sydney as the second most expensive city to rent a house, after Darwin.

“[These rises are] further evidence of the rising cost of housing in the harbour city, though unit rental growth remained flat over the September quarter,” says APM’s Andrew Wilson.

Yields for houses in Sydney have fallen 0.8% over the quarter to 4.67%, while unit yields fell 0.4% to 5.13%.

The report says rent rises in Perth were “extraordinary”, with house rents jumping 4.7% over the quarter and 15.4% over the year while unit rents jumped 2.6% over the quarter and 11.4% over the year.

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Source: APM

House rents in Perth are now at $450 per week, while unit rents are at $390 per week.

“Housing shortages are starting to bite in Perth as immigration levels surge,” says Wilson.

House yields in Perth increased 1.7% over the quarter to 5.12%, while unit yields increased 2.8% to 5.73%.

Rent rises in Darwin eclipsed all other state capitals, with median rents jumping 7.7% for houses and 10.4% for units over the quarter.

The rises consolidate Darwin’s lead as the state capital with the largest median rents for both houses and units.

Weekly rents in Darwin are now at $700 per week for houses and $530 per week for units.

Wilson says the rises in Darwin reflect “to a large degree the impacts of the transient nature of the workforce. Nonetheless, the Darwin rental market continues to struggle with an underlying shortage of available housing.”

House yields in Darwin fell 3.4% over the quarter to 5.14%, while unit yields increased 4.5% to 6.1%.

 

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Melbourne rents remain unchanged for the quarter and the year at $360 per week for houses and $350 for units.

“This reflects the higher vacancy rates and wider choice of rental properties for tenants that characterises the Melbourne market,” Wilson says.

Melbourne house yields rose 1.6%  over the quarter to 4.31%, while unit yields fell 0.1% to 4.64%.

Brisbane was almost as flat as Melbourne, with no change over the quarter for houses at $380 per week, though they are up 2.7% for the year while unit rents increased 1.4% over the quarter to $365 per week, the only rise for the year.

“This reflects a generally more subdued housing market in Brisbane,” Wilson says.

Brisbane house yields rose 0.7% over the quarter to 5.24% while unit yields rose 0.6% to 5.37%.

In Adelaide, house rents at $340 per week are unchanged over the quarter and up 1.5% for the year while unit rents dropped 1.8% for the quarter to $275 per week, the only change for the year.

“A generally subdued housing market for both buyer and tenant activity meant house rents were steady,” Wilson says.

Adelaide house yields rose 0.6% over the quarter to 4.83% while unit yields rose 1.1% to 5.14%.

In Canberra, house rents fell 1% over the quarter to $485 per week, though rents are up 3.2% for the year. Unit rents fell 2.3% over the quarter to $430 per week, nullifying rises in the previous quarter.

“[This] can be attributed to increased buyer activity providing less competition for rental properties,” Wilson says.

House yields in Canberra rose 2.6% over the quarter to 5%, while unit yields fell 0.8% to 5.55%.

And in Hobart, house rents rose 2.4% over the quarter, rebounding from declines last quarter, to $320 per week. Unit rents did the opposite, falling 3.8%, going back to September 2011 levels of $250 per week.

Across the nation, median asking rents for houses rose 1.6% over the quarter while units rose by 0.2%.

“Overall, rental markets will continue to produce varied outcomes reflecting the underlying drivers of each capital city,” Wilson says.

“In Sydney, Perth and Darwin, pressure on rents will continue as declining affordability impacts on first home buyers’ borrowing capacity with housing shortages and population increases combining to keep vacancy rates tight.

“For other markets, such as Melbourne, subdued housing market conditions, higher vacancy rates and less competition for available properties should see rental prices remain steady over the shorter-term.”