Rental prices beginning to rise in inner city markets: CoreLogic
Capital city apartment rents have increased by around 5 per cent compared with a 7 per cent rise in city house rents since the start of this year, according to CoreLogic.
“Rental demand is being deflected back towards inner-city precincts as other areas become less affordable for renters,” suggests Tim Lawless, director of research for CoreLogic.
Average capital city apartment rents across Australia have seen a fall of around 1 per cent, according to CoreLogic between March 2020 and September this year.
Melbourne’s apartment sector has been the weakest (with rents down 7 per cent), followed by Sydney (down 1 per cent).
Lawless advised that growing investor demand for apartments was driving recovery.
“Investor demand has historically been skewed towards the medium- to high-density sector, probably because of the lower maintenance and often higher yields associated with higher density-style dwellings,” he told The Australian Financial Review.
It has been noted investor mortgage demand had increased from a record low of around 23 per cent to more than 30 per cent.
Apartment price rises have slipped well behind houses while yields have risen, which makes it more attractive to many investors, according to CoreLogic.
“Both the lower entry point and higher yield profile may be an attractive option for investors as they become more active in the housing market,” Lawless says.
“Once international borders reopen, it’s likely rental markets will see an immediate and positive impact as migrants, such as students, seek out rental accommodation."