Canberra now the most expensive capital city to rent a house: Domain

For the first time in 11 years the cost of renting a house in Canberra is now higher than Sydney, according to the latest data from Domain.

The difference in weekly house rents between Canberra and Sydney has jumped to $20.

Canberra house rents increased 1.8 per cent over the quarter and 3.7 per cent over the year to $560 per week, while rental yields improved 1.4 per cent over the quarter and 0.6 per cent over the year to 4.36 per cent. 

Unit rents increased 3.3 per cent over the quarter and 8.1 per cent over the year to $465 per week.

Rental yields also improved 1.3 per cent over the quarter and 6.9 per cent over the year to 6.02 per cent. 

Domain Senior Research Analyst, Dr Nicola Powell said, “the nation's capital provided the second strongest annual growth of all the capital cities, although the pace has eased from the double-digit growth recorded mid-year. Unit rental prices have not been hit by the record levels of new development, experiencing the strongest annual growth the city has seen in almost two years.

“House rental listings have been shrinking for three years and unit listings have declined for just over a year on an annual basis. This has resulted in a five-year low of advertised rentals for a December quarter, a concerning scenario given we’ve now entered the peak rental period."

“A number of factors have contributed to Canberra’s rental boiling point. New residents continue to be lured from interstate and overseas by greater job prospects and the city’s growing and reputable university sector, while, transient contract workers are attracted by the major infrastructure projects underway. The high-income earning workforce has also helped to drive rents higher, making it increasingly unaffordable for lower income households.

"Investors are being slugged with higher rates and land taxes, and it is likely landlords are passing on the additional costs to tenants, or opting for high yielding short-term leases in order to recover costs. Rental yields may appear to be the highest in the nation, however, landlords are faced with higher holding costs compared to other jurisdictions,” she concluded.