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Rents continue to rise as supply shortage bites

Rental prices for houses in Australia’s capital cities have hit their highest point on record, with the median price now $508 per week, according to the latest data.

The Domain Rent Report for the March quarter showed that median house rents for the combined capital cities rose $9 in the three months to March and $40 compared to the same time in 2021.

The combined capital city rent rate for units is $448 per week, up from $436 in the previous quarter and $25 more than in March 2021.

Melbourne is the cheapest Australian city to rent a house, with a weekly asking rate of $450, while Canberra is the most expensive at $700.

Domain Chief of Economics and Research Dr Nicola Powell said the rental market was tight right across the country.

“The tension for renters continued in the March quarter with record high prices across a number of cities,” she said.

“When combined with Domain’s recent vacancy rates revealing that national rates decreased to their lowest on record in March, renters are finding themselves in a heated market with shrinking supply. 

“For renters facing this more cluttered market, considering whether unit rental options can provide a more affordable alternative to houses, or seeking out cities or suburbs where rental asking prices are showing to be more affordable or have higher vacancy rates, could help in landing a rental property.”

Sydney

​​In Sydney, house rents remained steady at their high of $600 a week, after the steepest annual increase in 13 years, at 9.1 per cent annually. 

As restrictions ease and international borders open, Sydney’s quarterly unit rent price growth is outpacing houses for the first time since before the pandemic. 

Units recorded 2 per cent rent price growth in the March quarter to reach $500 per week.

Contributing to this is affordability constraints on house rents and growing demand for units in the city where, after a two year hiatus, employees are returning to CBD offices and looking for centrally located rentals.

Melbourne

Melbourne remains the most affordable capital city to rent houses, recording the weakest annual growth at 3.4 per cent.

The city’s median house rent rate rose just 1.1 per cent in the March quarter to reach $450 per week.

However, unit rents had the steepest quarterly increase in eight years, up 4 per cent to $390 a week. 

In recent months, rental demand has increased, leaving tenants with fewer options, shifting the city into a landlords’ market.

Brisbane

Over the past quarter, Brisbane’s record-breaking streak continued, with house and unit rents rapidly rising to new record highs. 

Bucking the national trend, house rents continued to increase at 4.2 per cent over the last quarter at almost twice the pace of units, which recorded 2.4 per cent growth.

It now costs a median price of $500 per week to rent a house in Brisbane and $430 for a unit.

This trend is likely to continue as Queensland recorded the strongest population growth of all the states, driven by interstate migration from young families seeking better affordability, lifestyle change, work-life balance, and the expanding job market in Queensland.

Canberra

Canberra’s house rents increased 3.7 per cent over the quarter to $700, after surging 16.7 per cent over the past year. 

Escalating house rents have created a record gap between houses and units of 30 per cent, with the city’s median unit rent climbing 1.9 per cent in the quarter to $540 per week. 

Adelaide

Adelaide is experiencing a rental crisis with the advertised number of available rentals 69 per cent lower compared to the year before.

House rents hit a record high of $465 per week after a 3.3 per cent quarterly increase, while unit rents surged 5.6 per cent to a new high of $380 per week.

It is the seventh consecutive quarter house rents have risen in Adelaide, making it the longest period of continuous growth on record.

Hobart

In Hobart the rental market is also tight, with unit rents rising 4.7 per cent for the March quarter to a new record of $450 per week. 

House rents increased 4 per cent over the quarter to reach a new record high of $520, up 8.3 per cent annually.

In 2016, Hobart was the most affordable capital city to rent, but now it is the fourth most expensive.

Perth 

Perth house rents leapt 4.3 per cent over the quarter to $480, which is only $10 lower than the mid-2013 record. They are 11.6 per cent higher than last year.

Unit rents have reached the highest point since 2014 at $400 a week, after increasing 2.6 per cent over the quarter and 8.1 per cent annually.

Darwin

In Darwin, house rents increased 1.7 per cent over the quarter to $610 a week, which is 10.9 per cent higher than last year.

Unit rents increased 4.2 per cent over the quarter to $500 a week, which is 16.3 per cent on the same time last year. 

It is the longest period of continuous unit rent growth in Darwin’s history following seven consecutive quarterly increases.

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Kylie Dulhunty

Kylie Dulhunty is the Deputy Editor at Elite Agent.