In what is another positive sign for the property market across the country, units rents have risen for the first time since the onset of COVID-19.
According to the latest Domain rental report, unit rents are growing at the same pace as houses.
Across the combined capital cities both house and unit rents increased 2.5 per cent over the September quarter.
This was the first time unit rents had seen an increase in more than 12 months, in a sign that tenants are once again looking to move back to the major cities and into apartments.
The global pandemic has hit Sydney and Melbourne unit rental market hardest with long lockdowns, but in the September quarter both cities started to bounce back.
In Sydney, the weekly asking rent for units grew 3.2 per cent to $483, while Melbourne units recorded a 1.4 per cent jump with weekly asking rents hitting $370.
Domain’s Chief of Economics and Research, Dr Nicola Powell, said affordability is a big reason why tenants are once again choosing units.
“We’re seeing renters in cities such as Sydney, Melbourne, Canberra and Brisbane start to consider apartment living as an option shown by the unit rent increase, largely being driven by affordability, whether that’s people seeking a better deal or cities that have record high house rents become a strain on budgets,” she said.
Unit asking rents hit record highs in Brisbane ($410 per week) and Canberra ($520 per week), with the later the most expensive of the capitals to lease a unit in.
Adelaide units also maintained a record high with a weekly asking rent of $350.
In terms of houses, the combined capitals weekly asking rents hit record highs, climbing 5.5 per cent over the year.
House asking rents soared to new highs in Sydney ($580 per week), Brisbane ($460 per week), Adelaide ($440 per week) and Canberra ($645 per week), while in Hobart ($495 per week) they maintained a record high.
Dawin is the most expensive capital city to rent a house in at $620 per week.
Dr Powell said space was an important consideration for many tenants with a family or who need to share a house.
“In some cities, it’s clear that tenants are willing to pay a premium for space necessary for their lifestyle, as house rents achieve highs and rise at a faster pace for rentals with more bedrooms,” she said.
For the first time, asking house rents in Melbourne are the lowest out of all the capital cities, holding steady at $430 per week, which is a 2.3 per cent drop over the past year.
It’s the only city to have lower house rents now than before the pandemic started in March 2020.
Dr. Powell said that in Melbourne, vacancy rates are also on the decline.
“Melburnians have grappled with the longest lockdown of any city in the world, and this has contributed to the market’s weak rental growth,” she said.
“It is a good sign for tenants who are wanting more space and now is the time to negotiate on asking rents to secure a good deal.
“However, we have seen that vacancy rates have continued to decline, suggesting that the empty pool of rentals will continue to shrink and rents will not stay this low for much longer.”