Wednesday, 11 August 2010: Despite signs earlier this year pointing to a tough time ahead for renters, rental growth has remained largely flat in the June quarter, according to Australian Property Monitors’ Rental Price Series Quarterly Report. Nationally median rents for houses rose by just under one per cent, bringing annual growth to a relatively weak 3.1 per cent.
Units had a relatively strong quarter with national growth coming in at 3.5 per cent for the June quarter, making up for a slow 2009 and bringing annual growth for units to just over four per cent.
Sydney was the only major capital city to record rental growth for both houses and units, resulting in a weekly median rent of $480 for houses and $440 for units.
The rest of the major capital cities – with the exception of Canberra – saw rents falling for houses or remaining stable, with units recording only moderate rental growth in the quarter.
“Although vacancy rates remain low in most capital cities and unemployment continues to fall, the quarterly figures indicate that landlords accepted renters may not have been as willing to agree to rental increases in the June quarter,” said Matthew Bell, Economist for Australia Property Monitors.
“Higher mortgage costs have hit some landlords hard, but weak consumer spending and concerns over the global economy, reflected in the fall in the local share market, has meant that landlords have been conservative in raising rents compared to the March quarter,” said Mr Bell.
Of the major capitals, higher vacancy rates in Brisbane and Perth have translated into lower annual rental growth compared to Sydney and Melbourne, where vacancy rates remain relatively low.
“The lure of ownership has become less attractive for renters as property prices have risen significantly in most cities in the last year and interest rates have risen a long way off their lows, with more increases on the way,” said Mr Bell.
“As leases expire and are renewed however, it is expected that a robust employment market, rising incomes and the low vacancy rates in most capitals will start seeing asking rents increasing again, as we’re already seeing in Sydney, the country’s largest rental market.”
Tagged: Australian Property Monitors, rental growth, vacancy rates
