Australia’s rental market continues to be in favour of landlords, with rents remaining at historical highs across combined capital cities and regional markets.
Domain’s Rental Report for March 2023 showed that the combined capitals are in the longest stretch of continuous rental price growth, with house rents rising for eight consecutive quarters and unit rents marking its seventh quarter of increases.
Unit markets, particularly in Sydney and Melbourne, are witnessing a solid momentum in rental growth.
Domain chief of research and economics Dr Nicola Powell said for the first time since 2009, all capital cities have recorded house rents, highlighting the rental crisis the country is currently going through.
“With many factors to consider, we need to see a massive change to strike the right balance between tenants and landlords — no single solution can fix this rental crisis as it’s a compounding issue of the high cost of housing, insufficient investor activity, and lack of social and affordable housing.”
Here how rental markets in each capital city performed over the quarter:
Sydney
Median House Rent: $660 – up 1.5%
Median Unit Rent: $620 – up 6.9%
Sydney experienced stability in house rents over the last quarter of 2022. In March 2023, however, rents rose to a record high. Gross rental yields for houses were at their highest point since December 2020 at 3%.
Meanwhile, Sydney’s unit rents hit a record high after the steepest quarterly and annual increase. This has boosted gross rental yields for units to 4.4%, the highest level since 2014.
Melbourne
Median House Rent: $500 – up 4.2%
Median Unit Rent: $480 – up 6.7%
Melbourne’s house rents growth streak is the longest since 2008. Despite this, it remains the most affordable city to rent a house in.
Unit rents in Melbourne are also at a record high. They continue to outpace house rents for the fifth consecutive quarter, narrowing the gap to almost a three-year low.
Gross rental yields for both houses and units increased to 3.2% and 5%.
Brisbane
Median House Rent: $560 – up 1.8%
Median Unit Rent: $500 – up 4.2%
The annual growth in Brisbane’s house rents in March was the weakest since September 2021, suggesting that the upswing in house rents is already easing. Still, Brisbane’s gross rental yields for houses are at the highest points in 18 months at 4.2%.
Brisbane’s annual rent gains for units also slowed, albeit only marginally. On a quarterly basis, however, unit rents are at the longest streak. This means that gross rental yields for units continued to rise, hitting 5.6% in the quarter.
Adelaide
Median House Rent: $520 – up 4%
Median Unit Rent: $420 – up 5%
Adelaide recorded its highest annual rise in house rents since 2005. It is the most competitive city for tenants in Australia, with rents hitting growth that is double the previous quarter. This lifted the gross rental yield for houses annually for the first time since the pandemic started, reaching 4.2%.
Meanwhile, unit rents rose faster than houses as affordability of the latter posed major concerns for tenants. Gross rental yield for units in Adelaide was at 5.3% in the quarter.
Canberra
Median House Rent: $690 – no growth
Median Unit Rent: $550 – down 1.8%
Canberra maintained its house rents over the March quarter. It still is the most expensive market to rent a house in among all capital cities. Canberra reported a gross rental yield of 3.7% for houses over the period.
Canberra was the only capital city where unit rents fell over the quarter, marking its first quarterly decline since mid-2020. Due to this, it is no longer the most expensive city to rent a unit, as Sydney unit rents increased significantly over the period. Still, Canberra’s gross rental yield for units remained high at 5.5%.
Perth
Median House Rent: $550 – up 3.8%
Median Unit Rent: $450 – up 4.7%
Perth house rents increased for the sixth consecutive quarter in March, reaching a record high. House yields in the city was at 5.4% during the quarter, the highest among all capital cities.
Over the unit segment, Perth reported the second highest gross rental yield at 6.5%.
Darwin
Median House Rent: $650 – up 4.4%
Median Unit Rent: $520 – no growth
Darwin house rents doubled the previous quarter’s growth, pushing them back to record high last achieved in 2012. Darwin’s rental yield for houses was at a solid 5.8%.
While unit rents flatlined over the quarter, gross rental yields for the segment was the highest among all capital cities at 7.1%.
Hobart
Median House Rent: $550 – no growth
Median Unit Rent: $480 – up 2.1%
House rents in Hobart stabilised over the quarter, holding at the record high achieved over the last three-month period in 2022. Gross rental yields for houses in Hobart was at 4.3%.
Meanwhile, unit rents in the city lifted to another record high, but the quarterly growth has halved. Gross rental yields for units in Hobart was on par with houses at 4.2%.
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