Australia’s renters on the east coast may need to look a bit further afield to find more affordable places to live, with a new report revealing that the cheapest rents are found in Adelaide and Perth. Property investors however, may welcome news that the highest rents can be found in Canberra and Sydney.
According to Domain’s Q2 rental report at the end of the June quarter, Perth is the most affordable capital city to rent a house in Australia, while Adelaide is the cheapest capital to rent a unit. This is despite both cities seeing rents increasing over the past year – Perth house rents by 4.3% and Adelaide unit rents by 1.7%.
The report indicated a strengthening rental market in Perth, thanks to an improving Western Australian economy and a pick-up in population growth. Adelaide was also found to have a low vacancy rate. For property investors, rental yields were found to have risen for Perth houses and units due to falling prices and rising rents, while Adelaide’s rental yields were found to have risen modestly for units and to have remained steady for houses.
At the other end of the spectrum, the most expensive capital city to rent a house in the June quarter was found to be Canberra, where house rents remained unchanged at $550 over the year. For units, the capital city with the highest rents was Sydney, despite unit rents falling by 4.5% over the year.
The Canberra market was found to have been influenced by strong population growth (which has averaged 2 per cent a year for the past two years), creating ongoing demand for rental properties. For property investors, rental yields were found to have risen slightly in Sydney and modestly in Canberra, due to prices falling over the past year.
Looking at Australia’s other capital cities:
- Brisbane’s rental markets saw signs of strengthening, including the rental vacancy rate falling from 2.6% to 2.2% over the past year.
- In Hobart, house rents increased by 9.8 per cent over the year, and unit rents increased by 5.6 per cent, indicating a rental market under significant pressure.
- Melbourne was found to have experienced strong population growth since 2013, and despite the city’s biggest apartment construction boom over the past five years, rent on a typical unit grew 14% over this time.
- Darwin saw house and unit prices fall over the past five years, reflecting decreasing demand from the city’s decreasing population.