The cost of renting has hit record highs in four Australian capital cities with no sign of a slowdown in sight for 2016.
Domain.com.au’s quarterly rental report suggests that median weekly house rents in Melbourne Adelaide, Hobart and Canberra have surged to new record highs.
The report shows Melbourne average weekly house rents have jumped from $390 to $400 per week in the December quarter, a 5.3% increase over the past 12 months. Low, and falling, house vacancy rates also suggest that average house rents in Melbourne will continue to rise in the coming months.
Meanwhile Melbourne unit rents remained at the record high of $370 over the December quarter. However, significant new apartment development and rising vacancy rates are expected to moderate unit rental increases this year.
“Melbourne house rents have continued to soar to new record highs with low vacancy rates signalling that tenants can expect more increases to come. Unit vacancy rates, however, are increasing with new apartment stock surging,” Domain senior economist Dr Andrew Wilson said.
Median weekly house rents in Adelaide increased for the first time in 12 months over the quarter, jumping to $355 per week. Median units rental rates, however, remained steady, sitting at $290.
Like Melbourne, Wilson says the cost of renting is likely to continue to edge higher.
“Unfortunately for tenants, house rents have risen in Adelaide and with the already tight vacancy rates still falling, more increases are increasingly likely,” Wilson said.
Down in Hobart median housing rents also surged to a new record high of $340 per week. Median house rents have now increased by 6.3% over the past year – the highest result of all the capitals. Hobart unit rents remained steady over the December quarter, sitting at $280 per week – an increase of 3.7% over 12 months.
While Hobart still remains the most affordable capital city rental market, Wilson says it also has the lowest vacancy rates which indicates a continuing upward pressure on rents for tenants.
In Australia's capital city, median weekly house rents rose by 4.4% over the December quarter. Canberra’s median weekly rent now sits at $470 a week, according to the report. Median weekly unit rents also increased, jumping from $380 to $390 per week — an increase of 2.6% over the December quarter.
Again, Wilson says he doesn’t expect 2016 to see any slowdown in the cost of renting in the capital.
“Canberra house and unit rents are on the rise, with the low (and falling) vacancy rates recorded for houses indicating more rental increases on the horizon,” Wilson said.