Australia’s combined capital city rents have soared a further 10 per cent in the year to September, with tenants forced to look further away from the CBDs to find cost-effective properties.
According to the latest CoreLogic Property Pulse, rental options in our city CBDs and inner suburbs are becoming increasingly stretched.
“Across the combined capital city markets of Australia, rent values have risen another 10 per cent in the 12 months to September,” Head of Research Eliza 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.
“For those that work or study in the city centre, rent options are looking increasingly thin, and once relatively unpopular areas may be burgeoning with rental demand from high-income professionals.”
Melbourne provides the lowest median weekly house rent at $441 per week for a home in Albanvale, Laverton and Broadmeadows.
This is quickly followed by a house in Kings Park ($442pw) and Ardeer ($443pw).
Eight of the 10 markets with the lowest rents 20 km from the Melbourne CBD were in Melbourne’s West.
“The lowest house rents averaged $442 per week, or 23 per cent below the Greater Melbourne weekly rent value of $575,” Ms Owen said.
“Despite being within 20km of the CBD, commute times from suburbs like Albanvale and Kings Park to the city are around an hour by public transport.
“This means they may not be ideal locations for students or young professionals working in the city, but for young families these suburbs offer relatively low-priced house rents.”
Melbourne’s cheapest unit markets within 20km of the CBD range from $366 per week in Albion, to $420 a week in Thomastown.
“Rents across these suburbs are trending around 24 per cent below the Greater Melbourne median of $528 per week,” Ms Owen said.
“Albion units had the cheapest median value of these suburbs at $406,343, with rent yields recorded at 5 per cent.”
For the cheapest unit market within 2km of a capital city CBD, tenants should turn to the Brisbane suburb of Woodridge, which has a median weekly rent of $352 per week.
But after that comes a big jump to $436 per week at Rochedale South.
Ms Owen said weekly unit market rents were about 22 per cent lower than the Greater Brisbane median.
“Woodridge had the lowest median weekly rents for both houses ($501 per week) and units ($352 per week),” she said.
“Woodridge units were not only the cheapest median weekly rents within 20km of the Brisbane CBD, but were the lowest of the median weekly rents across all the capital city markets analysed within the 20 km range.
“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 per cent in September.”
As for house rents in Brisbane, Woodridge is again the cheapest, with a median weekly rent of $501 per week, followed by Inala at $503 per week.
Ms Owen said house rents averaged around 19 per cent below the Greater Brisbane median.
The lowest house rents within 20km of the Sydney CBD were all in the Parramatta region, led by Auburn, with a median weekly rent of $648 per week.
This was followed by South Granville ($657pw) and Granville ($673pw).
Ms Owen said those house rents were about 15 per cent lower than the Greater Sydney median of $775 per week.
But units offer a significantly more affordable option in Sydney with Berala, also in the Parramatta region, the cheapest within 20km of the CBD at $486 per week.
“The unit markets pose particularly good value, with median rents averaging around 27 per cent lower than the Greater Sydney median unit rent of $680 per week,” Ms Owen said.
“For students at Western Sydney University campuses in Parramatta and young health professionals, these markets may be ideal rental regions.
“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.”
Ms Owen said some of the Sydney unit markets were also enticing for investors.
“Each of the unit markets on the list have a gross rent yield of over 5 per cent, and Lakemba units are currently recording a gross rent yield of 6.2 per cent,” she said.
In Adelaide, eight of the 10 cheapest markets within 20km of the CBD were in the North Adelaide region.
Salisbury provided the cheapest option for houses at $473 per week, while Salisbury East was the most cost-effective for units with a median weekly rent of $361.
“Adelaide rent values have climbed 7.2 per cent in the past year, and 32.9 per cent since the start of the pandemic, with median house rents sitting at $568 per week, and units at $463,” Ms Owen said.
Interestingly, Taperoo, in Adelaide’s west, came in fifth for houses at $502 per week.
“Taperoo stands out as one of the most unique suburbs to make a list of cheap rentals,” Ms 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.”
In Perth, Girrawheen provided the cheapest median house rent within 20km of the CBD at $491 per week.
For units, Midland was cheapest at $433 per week.
“Perth rents have seen the largest cumulative uplift of any capital city rent markets since the onset of the pandemic, at 44.9 per cent,” Ms Owen said.
“With median weekly rents across the dwelling market sitting at $604 in September, this is the equivalent of an uplift in the median rent value of $186.
“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.”
Unlike most cities, Ms Owen said Hobart was experiencing a slight decline in rent values, which have dropped 1.7 per cent in the past year.
The suburb offering the cheapest median weekly rent for houses is Bridgewater at $485 per week, while for units it’s Claremont at $411 per week.
In Canberra, Higgins is the cheapest house market at $597 per week, while for units it’s Lyons at $468 per week.
“Similar to Hobart, Canberra is one of the few capital city markets seeing an annual decline in rent values,” Ms Owen said.
“Rents across the greater ACT were down 3 per cent year-on-year.
“Despite the recent fall, ACT rent values are among the most expensive of the capital city markets to rent in.
“In September, the median weekly house rent across the ACT was $686, while the median weekly unit rent was $569.”
In Darwin, the cheapest suburb for houses within 20km of the CBD was Moulden, with a median weekly rent of $539.
For units, Bakewell offers the most affordable homes at $457 per week.
“Similar to Perth, strength in the resources sector in the past few years, combined with more favourable migration trends, have seen Darwin rents grow quickly since March 2020,” Ms Owen said.
“Since the onset of the pandemic, Darwin rents are up 35.7 per cent, or the equivalent of $162 per week at the median rent value across the city.”