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The release today of the RP Data September 2014 Quarter Rental Review scorecard provides a thorough analysis of rental market activity over the period. Nationally, the annual rental rate for houses and units increased by 1.3 per cent while in the capital cities, house rents remained flat at 0% growth; rental rates for units increased by 2.4 per cent.
According to RP Data national research director Tim Lawless, investors entering the rental market need to be aware that rents aren’t rising anywhere near the pace of capital gains which is pushing rental yields lower, particularly in Sydney and Melbourne where values have increased the most at a time when rents aren’t doing comparatively much at all.
- For houses, Darwin currently holds the highest weekly median rental rate at $660 followed by Sydney $525, Canberra $480, Perth $462, Brisbane $400, Adelaide $350, Melbourne $390 and Hobart at $330.
- For units, Darwin once again emerged as the most expensive market on the rental rate front by recording the highest weekly median rental rate for the quarter at $550 followed by Sydney $500, Perth $450, Brisbane $390, Canberra $383, Melbourne $370, Adelaide $300 and Hobart $275.
- Click HERE to view Property Statistics Table
RP Data’s Tim Lawless noted that while detached house rents remained unchanged across the combined capital cities over the quarter, this cannot be said for each individual city. Brisbane is only city where rents remained unchanged. Melbourne (2.6 per cent), Darwin and Hobart (both 1.5 per cent), Adelaide (1.4 per cent) and Sydney (1.0 per cent) all recorded a rise in rents, while Perth (-2.7 per cent) and Canberra (-2.0 per cent) recorded a fall in rents.
RP Data analysts reported that over the third quarter of 2014 capital city rental rates for both houses and units remained unchanged. Across the combined capital cities, rental rates for houses were recorded at $430 per week, while median weekly rental rates remained at $420 for units. On a national level house rents also remained steady over the three months to September at $400 per week, while for units, rents fell by -1.3 per cent, down $5 over the quarter to $390 per week.
Across the unit market, none of the capital cities recorded a rise in rents over the September quarter and the majority of cities saw rents remain steady over the three months. Canberra rents fell by -3.2 per cent to $383 per week and Hobart rents fell by -1.8 per cent to $275 per cent.
Mr Lawless said, “the performance of rental markets are diverse, however the common theme is that generally the rate of capital gain is outpacing the change in weekly rents which is driving rental yields lower. This is happening at a time when investment demand is at record levels and trending higher, which highlights that most investors are focussing on capital gains and ignoring the low yield scenario. The softer rental conditions are likely the result of the surge in investor related activity which is seeing more rental supply hit the market.”