By Mina Martin
CoreLogic has revealed the top five suburbs within 20 km of central business districts that offer the lowest median rents for houses and units.
In CoreLogic’s latest Property Pulse, Eliza Owen (pictured above), head of research Australia, said that “once relatively unpopular areas may be burgeoning with rental demand from high-income professionals,” as rental options in the city centers become increasingly thin for those working or studying there.
“Across the combined capital city markets of Australia, rent values have risen another 10% in the 12 months to September,” Owen said. “Limited availability of stock, a strong net overseas migration position and a normalisation between city and regional population movements continues to place upwards pressure on capital city rent markets.”
See the table below for the suburbs near the CBDs with the cheapest rents, based on CoreLogic’s analysis of suburb-level markets with at least 20 rental listings in the past year.
Below are the cheapest house and unit rental markets by city. Owen noted that while some of these suburbs may be hidden gems for both renters and investors, others offer low rents for a reason.
The most affordable rents within a 20 km radius of Sydney's CBD were concentrated in Parramatta and the Inner South West.
“For students at Western Sydney University campuses in Parramatta and young health professionals, these markets may be ideal rental regions,” Owen said.
“Lakemba, which has the closest average proximity to the CBD among the top five, is also an easy commute to Sydney’s trendy inner west, where there are an abundance of entertainment venues, breweries, and popular restaurants.”
Some of the areas listed above may also be appealing to investors, with each of the unit markets on the list having a gross rent yield of more than 5%, and Lakemba units currently yield 6.2%.
Eight of the 10 most affordable rental markets within 20 km of Melbourne’s CBD are in Melbourne’s West, with lowest average house rents at $442 per week, 23% below Greater Melbourne’s $575 average.
Owen noted that despite being within 20kms of the CBD, suburbs like Albanvale and Kings Park may not be ideal for those studying or working in the city, as it would take them around an hour to reach the city by public transport.
“But for young families these suburbs offer relatively low-priced house rents,” she said. “There are nearby employment hubs around industrial and warehousing precincts in the city’s west, and by car the city is around a half-hour away.”
Within 20km of the Brisbane CBD, the suburbs with the lowest median weekly rents were largely across Ipswich and the Logan–Beaudesert market. House rents in these areas averaged around 19% below the Greater Brisbane median, while unit rents were approximately 22% lower.
Woodridge, in particular, was an affordable location for renters, having median weekly rents of $501 and $352 for houses and units, respectively.
“The suburb is around a 20-minute commute to the Brisbane CBD via Springwood station, and is conveniently located within Logan on the Karawatha Forest, and commercial centres of Logan Central and Slacks Creek. Rent yields across units in this market were recorded at 7% in September,” Owen said.
The suburb with the lowest median weekly rents nearest Brisbane CBD was Rocklea, where house rents were recorded at $544 per week in September.
“While only around 25-minute drive from the CBD, Rocklea is a relatively high flood risk area of Brisbane and is priced at a low level to the neighbouring house markets of Salisbury ($624 per week), and Moorooka ($664 per week),” Owen said.
Eight of the 10 most affordable markets within a 20km of Adelaide’s CBD were in the North Adelaide region, with St Marys units in Adelaide’s south and Taperoo in the west the exceptions. Adelaide’s rental prices have surged by 7.2% in the past year and by 32.9% since the start of the pandemic, with median house rents now at $568 per week and units at $463.
“Taperoo stands out as one of the most unique suburbs to make a list of cheap rentals,” Owen said. “It is located on the LeFevre Peninsula, where the suburb boasts a beautiful foreshore and beach. Taperoo Is an eight-minute drive to Port Adelaide, which is burgeoning with breweries and cafes.
“It might not be a first choice of rental markets for young professionals or students, but for those willing to commute around an hour by train to the city, it’s a relatively affordable beachfront setting.”
Perth has recorded the biggest cumulative increase in rents among all capital city rental markets since the start of the pandemic, with a surge of 44.9%. In September, the median weekly rent across the dwelling market was $604, representing a $186 increase in the median rent value.
“As population growth surges across Western Australia, and monthly rent growth remains high, no doubt relatively cheap pockets of the city will become more popular,” Owen said.
The house markets on the list each posted gross rent yields of at least 6%, and median values under $500,000. Overall, house rents in these suburbs averaged -17% below the Greater Perth median house rent value of $613. Gross rent yields across the listed unit markets were also high, ranging from 6.7% in Hamilton Hill to 7.6% in Gosnells.
“The closest unit market to the CBD, Noranda, is fairly thin on amenities and entertainment for young professionals and students, but there is a lively commercial precinct just south in the suburb of Morley,” Owen said.
Unlike many cities, Hobart is seeing a slight drop in rental values, albeit after an extended period of rising rents throughout the 2010s. Over the past year, rental values have fallen -1.7%, with the median house rent at $541 per week and units at $463.
“Berriedale was the closest of the house markets to the city centre, and had a relatively high gross rent yield of 5.1%,” Owen said. “The suburb is accessible to the city via a half-hour bus ride, or a 20-minute drive.”
For Hobart units, the average weekly rent was $437, around -6% lower than the median weekly rent across Greater Hobart.
Canberra, similar to Hobart, is also experiencing a yearly decline in rental values, with rents across the greater ACT falling -3%. Despite the decrease, ACT rental values were still among the highest in the capital city markets. The median weekly house rent in the ACT last month stood at $686, and the median weekly unit rent at $569.
Compared to the cheaper house rent markets on the list, which were concentrated in Canberra’s north-west, Lyons, Chifley, and Mawson in the south of the city, the unit markets on the list “are still a relatively short drive from the city centre and are closer to the Australian National University than University of Canberra,” Owen said.
Since the onset of the pandemic, Darwin rents are up 35.7%, or the equivalent of $162 per week at the median rent value across the city. As of September, the median Darwin house rent was $675 per week, while the median unit rent was $519.
Owen noted that much like Perth, the strength of the resources sector in recent years, combined with more favorable migration trends, has resulted in rapid rent growth in Darwin since March 2020.
Since the start of the pandemic, rents in Darwin have surged 35.7%, or an increase of $162 per week, in the median rent value across the city. In September, the median weekly rent in Darwin was $675 for houses and $519 for units.
From an investment perspective, Moulden, Gray, Driver, Woodroffe, and Bakewell with the lowest house rents, have gross rent yields of more than 7%.
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