Tenant turmoil: the suburbs where rents are rising faster than home prices

Landlords have been raking it in across a range of Australian locations where rises in rents have eclipsed home price increases.

Rents have been soaring faster than home prices in a range of suburbs across the country over the past year, according to analysis from Finder.

Six of the top 10 locations were suburbs in Western Australia, where rents have skyrocketed throughout the pandemic.

Sarah Megginson, senior editor of money at Finder, said renters in Western Australia had been hit hard financially since Covid began.

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“Rents haven’t increased very much in a number of years and now the market is playing catch up. Vacancy rates are extremely tight and rents are rising as a result,” she said.

“The state has virtually cut itself off from the rest of Australia too, so the usual transition of migration in and out of the state has slowed right down. All of this is putting pressure on the rental market.”

Rents have climbed while prices have dropped in some parts of Perth.

Kensington in Perth took out the top spot after rents there increased by a whopping 32 per cent, or $145 a week, in 12 months while house prices actually declined by 3 per cent.

Second on the list, and also in Perth, Ascot saw rents rise by 32 per cent, or $70 a week, but home prices dipped by -14 per cent.

Queensland’s Hollywell came in third with a 29 per cent jump in rent, or $213 a week, compared with a 9 per cent fall in prices.

Ms Megginson said that since Australians have been spending more time at home through the pandemic, many renters have upsized.

“House rents have risen at more than double the rate of unit rents last year, as people looked for more space to work and study from home,” she said.

With vacancy rates dropping, tenants have had to fork up in many locations.

“It’s not just the big cities seeing escalating rents take over price growth. Employers across the nation have adopted ‘work from anywhere’ policies, which has boosted demand for rental properties in regional areas.”

While the post-pandemic landscape is trickier in some neighbourhoods, Ms Megginson said savvy tenants should do their homework.

“Study up on rent prices in your desired area – it’s hard to negotiate if you don’t know what you’re up against,” she explained.

“When preparing to negotiate, don’t be shy to toot your horn about why you’ll be a good tenant. Rental CVs are becoming more popular and they’re a great way to stand out.

Source: Finder.com.au.

“If you’re able to, bring examples of how you’ve paid your rent in full and on time, or offer character references and consider incentives that might put you at the top of the landlord’s list.”

And as a warning for tenants experiencing mid-lease rent increases, she said it pays to know your rights.

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“If the rent hike is really substantial, many people don’t realise you can ask for a lower amount. Landlords are entitled to increase their rates in line with market moves, but you can take your case to the tribunal if you think it’s really unfair.”

Originally published as Tenant turmoil: the suburbs where rents are rising faster than home prices