Rental pace picks up under pressure

Rental properties in some suburbs are being snapped up in half the time they were last year as tenants continue to compete for the few homes available.

Rental properties in some suburbs are being snapped up in half the time they were last year as tenants continue to compete for the few homes available.

The time it is taking to rent a property in Sydney and Melbourne has picked up more than any other capital city, according to new analysis by PropTrack.

Houses in a dozen suburbs are securing tenants more than 40 per cent faster than July last year, as demand rises across ­desirable and suburban locations.

Houses in the Sydney suburb of Beecroft, Blue Mountains town Hazelbrook and Melbourne’s Nobel Park North are being leased more than 45 per cent faster than in July last year and are spending fewer than 19 days on the market.

Units in the NSW central coast town of Bateau Bay have been snapped up in just 10 days, a 47 per cent increase year-on-year.

Rental properties in some Australian suburbs are being snapped up in half the time they were last year. Picture; AAP Image/Lukas Coch

It is a similar story in the suburban Melbourne areas of Mont Albert North and Melton, where tenants are securing leases in fewer than 20 days, 53 per cent and 48 per cent respectively faster than last year.

PropTrack economist Anne Flaherty said tenants jumping into the buying market had put pressure on desirable locations.

“The fact that we’re seeing the time it takes for a property to rent out fall signals that we’re going to continue to see rents rise … and that yields are likely to increase,” she said.

“Investors still need to service those loans, even if they’re negatively geared, so a low vacancy risk and the prospect of more rent growth, that’s definitely ­desirable.”

While the smaller capital cities of Brisbane, Adelaide and Perth have not climbed at the same level, properties in the most in-demand locations are being rented after little more than two weeks, on average.

Over the past year, the number of investors entering the market has began to rise.

Australian Bureau of Statistics data shows a 30.2 per cent – equivalent to $2bn – rise in the value of loans taken out by property investors over the past year.

Ms Flaherty said the increased appetite from investors has helped relieve some of the pressure on the rental market, with availability loosening slightly in recent months. The total number of rental properties listed for rent in the June quarter rose 10.7 per cent, with vacancy rates improving 0.3 per cent to 1.4 per cent compared to the three months to March.

However, the cost of weekly rents have lifted over the past year by 9.1 per cent, or $50 each week, to a median of $600.

PropTrack economist Anne Flaherty

“The fact that we are seeing investors return is good news for those tenants who aren’t looking to buy,” Ms Flaherty said.