Rents continue to rise but house prices slow while unit rentals in the inner city soar

Post pandemic population growth has sparked a rise in inner city apartment rental prices while houses have flatlined. | SEE THE LIST

Rents continue to rise in the September quarter with prices for inner city apartments outpacing houses in the capital cities.

According the latest PropTrack Insight report advertised dwelling rental prices were 3.8 per cent higher over the quarter nationally, with the median advertised house rent now $550 a week and unit rentals $520 a week.

In the capital cities house rental prices rose 0.9 per cent in the quarter to $575 per week and 10.6 per cent over the 12 months while at the same time unit rentals rose 4.8 per cent to $550 a week and 19.6 per cent over the year.

PropTrack director economic research Cameron Kusher said the rental price differential between houses and units blew out over covid but was narrowing as population growth and a lack of supply squeezed the market.

“During the pandemic rents for houses were rising at a much faster pace so the gap between renting a house and a unit got quite wide and it’s still wider than it was before the pandemic hit,” he said.

“Also, if we look at what’s happening in the unit market there is a lot more demand for the inner city and middle ring suburbs around the country from people who now want to rent in those areas that are already here and those coming into the country from overseas who are mostly students and workers.”

Nationally, house rents were unchanged over the quarter and they rose 10 per cent for the 12 months to the end of September while unit rents were 4 per cent higher over the quarter and 15.6 per cent higher in the year.

Growth in the capital cities is outpacing growth in the regions with rents growing 12.2 per cent in the 12 months to September compared to country areas which rose 6.7 per cent.

The flatlining of regional rents over the past six months may point to softer rents for the regions in the coming months while Mr Kusher said he expected rental growth to continue in the major capital cities but “not at the same magnitude” seen over the past 12 months.

Sydney remained the most expensive rental market in the nation with a median a rent of $650 a week – an increase of 3.2 per cent in the quarter and 18.2 per cent for the year, followed by the ACT on $600 a week, Darwin $570 and Brisbane $540.

Mr Kusher said Melbourne, Adelaide and Hobart were the least expensive capital cities with advertised dwelling rents all at $500 a week.

“Melbourne has always been relatively affordable to rent,” he said.

“Rents there have picked up over the past 12 months but during the pandemic rental growth was much more subdued in Melbourne that anywhere else.”