House Rental Prices & Performance - December 2022 Unit Rental Prices & Performance - December 2022 House Rental Yields - December 2022 Unit Rental Yields - December 2022

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The rental market is embarking on its busiest period for the year and units are likely to be a popular option for many potential tenants.

Domain chief of research and economics Dr Nicola Powell said affordability will be units’ main selling point, especially amid the country’s cost of living crisis.

“Unit rents have been growing faster quarterly than houses in most capital cities, likely because affordability concerns continue to persist,” she said.

This is particularly prevalent in Sydney and Melbourne, where unit rents have risen significantly - both quarterly and annually - in December.

“This suggests that budget-conscious tenants are making the shift from houses to units to suit their current budgets while still being close to work, school and amenities,” Dr Powell said.

House Rental Prices & Performance - December 2022

Capital City Dec-22 Sep-22 Dec-21 QoQ YoY
Sydney $650 $650 $580
0.0%
+12.1%
Melbourne $480 $470 $445
+2.1%
+7.9%
Brisbane $550 $550 $480
0.0%
+14.6%
Adelaide $500 $490 $450
+2.0%
+11.1%
Perth $530 $500 $460
+6.0%
+15.2%
Hobart $550 $540 $500
+1.9%
+10.0%
Canberra $690 $680 $670
+1.5%
+3.0%
Darwin $620 $613 $590
+1.2%
+5.1%
Combined Capitals $550 $530 $480
+3.8%
+14.6%

Unit Rental Prices & Performance - December 2022

Capital City Dec-22 Sep-22 Dec-21 QoQ YoY
Sydney $575 $550 $485
+4.5%
+18.6%
Melbourne $450 $425 $375
+5.9%
+20.0%
Brisbane $480 $460 $420
+4.3%
+14.3%
Adelaide $400 $400 $350
0.0%
+14.3%
Perth $430 $420 $390
+2.4%
+10.3%
Hobart $465 $450 $425
+3.3%
+9.4%
Canberra $560 $550 $530
+1.8%
+5.7%
Darwin $520 $500 $480
+4.0%
+8.3%
Combined Capitals $500 $485 $425
+3.1%
+17.6%
Overall, Australia has seen the steepest annual rental increase on record in December, at 14.6% for houses and 17.6% for units across the capital cities.

These gains have put rents at record highs across all cities, apart from Darwin and Perth.

It is important to note, however, that the pace of quarterly growth has already eased in across the capital cities compared to the earlier months of 2022.

This suggests the seasonal lift in supply or the affordability ceiling has already being reached by tenants, according to Domain.

“The highly competitive rental market that we saw last year is going to be amplified as Australia goes on the busiest period in the rental calendar in January,” Dr Powell said.

“Due to a seasonal lift, those on the hunt for a new lease this quarter will find slightly more choice as the rental market moves into its busy changeover period at the start of the new year freeing up some homes for a short amount of time.”

Dr Powell said the rental market continues to be in a “highly competitive nature” and there are no quick fixes to ease the current conditions.

“The government’s commitment to building more housing is a great start but we need to see further progress and a change in land use and planning rules to allow for more homes to be built in middle-ring suburbs,” she said.

As the population continues to grow, especially on the back of the reopening of Australian borders, Dr Powell said investors are needed to address the limited rental market supply.

“Investors should be encouraged to participate in social, community and affordable government housing programs,” she said.

“On top of that, seeing meaningful improvements in gross rental yields this quarter will hopefully encourage investor activity helping to address supply issues.”

House Rental Yields - December 2022

Capital City Dec-22 Sep-22 Dec-21 QoQ YoY
Sydney 2.87% 2.72% 2.56%
+5.5%
+12.1%
Melbourne 3.05% 2.94% 2.85%
+3.7%
+6.8%
Brisbane 4.05% 3.93% 3.93%
+3.0%
+3.0%
Adelaide 4.13% 4.08% 4.13%
+1.3%
+0.1%
Perth 5.31% 5.22% 5.07%
+1.7%
+4.7%
Hobart 4.09% 3.93% 3.96%
+4.2%
+3.4%
Canberra 3.63% 3.55% 3.56%
+2.2%
+1.8%
Darwin 5.76% 5.72% 5.56%
+0.7%
+3.5%
Combined Capitals 3.39% 3.29% 3.27%
+2.9%
+3.7%

Unit Rental Yields - December 2022

Capital City Dec-22 Sep-22 Dec-21 QoQ YoY
Sydney 4.11% 3.82% 3.34%
+7.7%
+23.2%
Melbourne 4.51% 4.28% 3.81%
+5.3%
+18.4%
Brisbane 5.36% 5.25% 5.01%
+2.0%
+7.0%
Adelaide 5.26% 5.29% 5.32%
-0.6%
-1.2%
Perth 6.32% 6.00% 5.73%
+5.3%
+10.1%
Hobart 4.05% 3.81% 3.96%
+6.3%
+2.3%
Canberra 5.38% 5.32% 5.53%
+1.0%
-2.7%
Darwin 7.06% 7.19% 6.77%
-1.7%
+4.4%
Combined Capitals 4.50% 4.22% 3.77%
+6.7%
+19.2%
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Data Tables from Domain
Header Photo by Sharath G. from Pexels.