Perth and Melbourne units lead rental growth in March quarter as Sydney stagnates

The cost of renting a two-bedroom apartment in Perth increased by 7.1% over the March quarter to $450 per week, according to the latest Real Estate Institute of Australia report.

The Perth apartment market led the nation in quarterly rental growth ahead of Melbourne units, where the weekly rent increased by 5.7% to $370 per week.

Sydney unit rents were unchanged at $470 per week with Darwin the only market to record a decline in unit rents over the quarter, albeit just 0.2%.

A two-bedroom  Darwin apartment rents at $471 per week – just above Sydney – and is the most expensive capital city in Australia to rent an apartment.

Despite the recent slim correction, Darwin has been the best performing unit rental market (from a property investors’ point of view) over the past 12 months, registering an 18% annual rise.

Perth is the second best performing rental market on an annual basis with a 12.5% rise over the past 12 months followed by Sydney (4.4%) and Melbourne (up 2.8%).

Driving up rents have been low vacancy rates.

Perth, Sydney and Brisbane have the tightest unit markets with vacancy rates of just 2% followed by Melbourne (2.2%), Darwin (2.3%) and Canberra (2.9%) which all sit below the 3% benchmark vacancy rate.

Vacancy rates below 3% generally indicate a rental market favouring tenants while a vacancy rate above 3% is said to favour renters.

Hobart has the highest unit vacancy rate among capital cities of 4.8% - its weekly rents have fallen 5.3% over the past year.