Extract from The Guardian
Low numbers of first home buyers and unusually high numbers of
investors are pushing up rents in all capitals except Darwin and Perth, a
new report finds
Rents have continued to increase in almost every Australian capital
city with unprecedented levels of investment contributing to the average
rental for an apartment in Sydney jumping to more than $500 a week over the past year.
The median weekly rent has increased over the past year in Sydney, Brisbane, Melbourne and Adelaide but is falling in Darwin and Perth, according to the latest Domain Group Rental Report.
The median weekly rent for a Sydney house is $530, an increase of 1.9% over the past quarter while units were steady at $500.
Domain senior economist Dr Andrew Wilson said a combination of factors, including the high rates of investing and low numbers of first home buyers, had led to the increases.
“We would have expected some rental relief for tenants by now,” he said. “The continued increase in rental prices is indicative of the low numbers of first home buyers and the pressure on the rental market as a result.
“Unprecedented residential investor activity in Sydney over the past year and a surge in new dwelling construction have failed to provide rental relief for tenants.”
Housing affordability has started to become a pressing issue for state and federal governments. The New South Wales budget had record revenue of more than $7bn from stamp duty, and the government faced criticism for not doing enough to improve housing affordability and rents.
Mission Australia last month called on the federal treasurer, Joe Hockey, to chair a housing summit after he said people needed a good job to buy a house.
Wilson said high returns on rents was one of the key drivers for investors buying up properties.
“On average, investors are seeing positive returns,” he said. “Residential yields remain ahead of average term deposit rates, which are at historically low levels.
“Although increasing rent is likely to continue in most capitals for the remainder of 2015, early signs of relief are emerging for tenants with vacancy rates easing over June. That said, investors are set to remain active, particularly in the Sydney market, given the high yields, low interest rates and the likelihood of continued solid capital growth.”
Brisbane rents for units increased by 1.4% over the past year to $370 a week while houses were $400. Melbourne house rents have risen to a weekly median of $390 a week while unit rents increased by 1.4% to $370.
House rents in Adelaide increased by 1.4% over the past year while units increased by 1.8%.
In Hobart, over the quarter, house rents increased by a sharp 6.5% while unit rents fell by 3.6% to $270 a week, but over the year had still risen by 1.9%.
In Perth house and unit rents are down to $430 and $375 respectively, falling by 6.5% and 6.3% over the year. Darwin has also seen a fall with the weekly median house rent at $600 a week, down by 7.7%, and units down by 9.1% to $500 a week.
Canberra house rents remained steady at $450 per week over the June quarter and were also steady over the year. Similarly, Canberra unit rents were steady at $390 per week over the quarter but increased by 1.3% over the year.
The median weekly rent has increased over the past year in Sydney, Brisbane, Melbourne and Adelaide but is falling in Darwin and Perth, according to the latest Domain Group Rental Report.
The median weekly rent for a Sydney house is $530, an increase of 1.9% over the past quarter while units were steady at $500.
Domain senior economist Dr Andrew Wilson said a combination of factors, including the high rates of investing and low numbers of first home buyers, had led to the increases.
“We would have expected some rental relief for tenants by now,” he said. “The continued increase in rental prices is indicative of the low numbers of first home buyers and the pressure on the rental market as a result.
“Unprecedented residential investor activity in Sydney over the past year and a surge in new dwelling construction have failed to provide rental relief for tenants.”
Housing affordability has started to become a pressing issue for state and federal governments. The New South Wales budget had record revenue of more than $7bn from stamp duty, and the government faced criticism for not doing enough to improve housing affordability and rents.
Mission Australia last month called on the federal treasurer, Joe Hockey, to chair a housing summit after he said people needed a good job to buy a house.
Wilson said high returns on rents was one of the key drivers for investors buying up properties.
“On average, investors are seeing positive returns,” he said. “Residential yields remain ahead of average term deposit rates, which are at historically low levels.
“Although increasing rent is likely to continue in most capitals for the remainder of 2015, early signs of relief are emerging for tenants with vacancy rates easing over June. That said, investors are set to remain active, particularly in the Sydney market, given the high yields, low interest rates and the likelihood of continued solid capital growth.”
Brisbane rents for units increased by 1.4% over the past year to $370 a week while houses were $400. Melbourne house rents have risen to a weekly median of $390 a week while unit rents increased by 1.4% to $370.
House rents in Adelaide increased by 1.4% over the past year while units increased by 1.8%.
In Hobart, over the quarter, house rents increased by a sharp 6.5% while unit rents fell by 3.6% to $270 a week, but over the year had still risen by 1.9%.
In Perth house and unit rents are down to $430 and $375 respectively, falling by 6.5% and 6.3% over the year. Darwin has also seen a fall with the weekly median house rent at $600 a week, down by 7.7%, and units down by 9.1% to $500 a week.
Canberra house rents remained steady at $450 per week over the June quarter and were also steady over the year. Similarly, Canberra unit rents were steady at $390 per week over the quarter but increased by 1.3% over the year.
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