Rents for both houses and units have reached to new heights across capital cities over the third quarter of 2023.
According to Domain’s latest Rental Report, capital city rents increased by 1.9% to $470 for houses and 6.5% to $420 for units during the quarter.
Domain chief of research and economics Dr. Nicola Powell said the misalignment between supply and demand has resulted in increasing rents.
“Demand pressures have been caused by a combination of factors, including the lack of affordable home ownership, changing household formation and the return of skilled migrants and international students,” she said.
“On the supply side, we have seen delays in building completions due to supply chain issues, weaker investment activity and the conversion to short-term rentals as tourists return.”
Dr Powell said the consecutive rate increases is also one factor that may have pushed some landlords to pass on additional home loan costs.
Here are some highlights:
- Sydney continued its record-breaking streak, resulting in the steepest annual increase in house rents since 2009 at 14%.
- Melbourne has almost recovered fully from the pandemic-induced supply surplus and lowered asking rents. Still, Melbourne reigns as the most affordable capital city to rent a house with the value gap widening from the other capital cities.
- Brisbane experienced the longest stretch of continuous unit rental price growth on record.
- Adelaide remained as the most competitive capital city to find a rental property, as supply shortage exacerbated the rental crisis.
- Canberra’s long-running streak of rent increases ended over the quarter as house rents declined for the first time in over two years.
- Hobart’s rental growth stalled over the quarter, but rents remained record high.
- Darwin’s rental growth also slowed but it continued to reign as the highest-yielding capital city for both units and rents.
- Perth reported robust rental gains for both houses and units.
