House rents have hit record highs in every capital city in Australia except Melbourne, Perth and Darwin.
- Canberra remains the country’s most expensive capital city for renters
- Melbourne is now one of the cheapest cities in Australia to rent a house or unit
- Perth and Darwin have experienced the largest increases in rental prices of any other capital city
But for the first time on record, Melbourne has become the second-most-affordable capital city in Australia in which to rent a house, equal with Perth and behind Adelaide.
Melbourne could become the most affordable city in the country in which to rent a house and unit this year, if present trends continue.
That’s the finding from Domain’s latest quarterly rent report, released on Thursday.
The March quarter report shows Australians are still adjusting geographically to the shock of the COVID lockdowns.
A significant shift in preferences for houses over units, for outer-city regions over cities and for some capital cities over others, is still affecting rents around the country in 2021.
Here’s what Domain’s March quarter report says about your capital city, or the capital city nearest to you.
Brisbane rents at record highs
For the first time in five years, it is more expensive to rent a house and unit in Brisbane than in Melbourne.
House rents have seen their steepest annual increase since 2008. They are now $440 a week, on average, up $30 from one year ago.
Unit rents are $15 a week higher compared to last year, sitting at $400 a week.
“Tenants will find less choice [in coming months], with the pool of available rentals shrinking by one-third compared to last year, pushing Brisbane’s vacancy rate to a multi-year low,” said Domain senior research analyst Nicola Powell.
“House and unit rents held steady or increased in all regions across Greater Brisbane over the March quarter, apart from unit rents in Ipswich sliding a mere $5 a week.
“Annually, the biggest jump in asking rent was recorded for houses in Brisbane’s north and Moreton Bay North, the steepest annual increase since 2008, up 6.8 per cent and 6.7 per cent annually.”
Dr Powell said Queensland had always been a preferred destination for people moving interstate, but the pandemic may have fast-tracked peoples’ decisions to relocate.
“More Australians are deciding to relocate to the sunshine state, with the annual number of residents moving from other states into Queensland hitting the highest level since 2006,” she said.
Canberra: a landlord’s nirvana
Canberra remains the most expensive capital city to rent a house or a unit in the country, at $600 a week and $500 respectively, on average.
It costs $50 more to rent a house in Canberra than in Sydney, and $30 more to rent a unit.
Canberra’s landlords know it, too.
“Tenants have been operating in a landlords’ market for some time and landlords have become accustomed to the fierce competition to secure a lease,” Dr Powell said.
“The vacancy rate fell further in March to 0.7 per cent, similar to the tight rental market conditions seen in 2018 when rental prices were rising.
“Tenants will find the task of securing a lease harder [from here], as the estimated number of vacant rentals continues to decline.
“This is during a time when Australian expats return, temporary overseas employees extend stays and the city is better placed economically, buoyed by the public sector and industries reliant on government spending,” she said.
Melbourne could become cheapest city in Australia for renters
Conditions remained weak in Melbourne’s rental market in the March quarter, according to Domain.
House rents were $430 a week, having slipped $10 a week from last quarter’s record high.
However, the house rental market is not uniform. House rents pushed to record highs in the outer east, south east and Mornington Peninsula.
Unit rents fell another $10 over the March quarter to $375 a week, marking 12 consecutive months of declining rents.
The cost of renting a unit has now returned to 2015 levels after the steepest annual fall since Domain’s records began in 2004.
“For the first time on record, Melbourne is the second-most-affordable capital city to rent a house, joint with Perth and behind Adelaide,” Dr Powell said.
“It was only mid-2020 that Melbourne was the third-most-expensive city to rent a unit, behind Sydney and Canberra. It is now the third-most-affordable city to rent a unit, after Adelaide and Perth.”
“Tightening rental conditions in Adelaide and Perth could push rents higher than Melbourne in coming months, which would make Melbourne the most affordable city [in which] to rent.”
Perth rents increase by most of all capital cities
Perth rents continued to soar in the March quarter.
Tenants now face their highest asking price in almost six years.
Perth’s house and unit rents have seen the fastest annual jump of all capital cities, with house rents increasing 14.7 per cent in the last 12 months to $430 and unit rents increasing 14.1 per cent, to $365.
Tenants are still paying well below 2013 peaks but the gap is rapidly closing. House rents are $60 cheaper than in 2013 while unit rents are $85 cheaper.
“In half a year, Perth has moved from the most affordable capital city to more expensive than Adelaide,” Dr Powell said.
“House rents are now on par with Melbourne.
“More Australian are opting to move to Greater Perth with net interstate migration finally positive, the first net gain of interstate migrations since 2013. This will place additional demand on housing,” she said.
Sydney: stability returns to the market
Sydney’s rental market has shown signs of stabilising in 2021, with house and unit rents holding steady in the March quarter.
Unit rents held at $470 a week, on average, after a steady nine-month decline last year — which was their steepest annual fall since Domain records began in 2004, tumbling 9.6 per cent.
They’re currently sitting $50 a week lower than this time last year, which means they’re sitting at 2013 prices.
However, house asking rents remain at a record high of $550 per week, the same as in the December quarter, which is 3.8 per cent higher than 12 months ago.
“Sydney’s rental market remains varied depending upon property type and location,” Dr Powell said.
“House rental conditions are tighter compared to units and prices have become more competitive in the outer suburbs.
“Central Coast house and unit asking rents have pushed to record highs. Northern Beaches, Sutherland, outer-south-west and Blue Mountains house rents are also commanding record high asking rents.
“House rents in the eastern suburbs remain $100 a week lower annually and units are down $70. Unit rents in the city and inner south are down $90 a week and in North Sydney and Hornsby down $80 a week compared to the same period last year,” she said.
Hobart house rents hit new record high
Hobart rents jumped by $20 in the March quarter, pushing house prices to a new record high and unit rents back to the record first achieved a year ago.
Asking rents for houses are now $480 a week, while units are $420 a week.
“It was only roughly five years ago Hobart was the most affordable capital city to rent, it is now the fourth-most-expensive to rent a house and unit,” Dr Powell said.
“The number of estimated vacant rentals has declined by 38 per cent compared to the same time last year. As the rental moratorium comes to an end, landlords are likely to adjust rents accordingly.”
Hobart’s rental market performance varies depending upon location.
House rents in Sorell-Dodges Ferry have soared 12.4 per cent compared to the same time last year, but inner-Hobart rents are lower than they were 12 months ago, down 2.7 per cent for houses and 5.6 per cent for units.
Adelaide rents at record highs, but still most affordable capital city in the country
House and unit rents are at record highs for Adelaide.
House rents are $425, up $15 a week in the March quarter, while unit rents are now $350, up $10 a week.
“This is the steepest quarter and annual rise in house rents since 2009, up 3.7 per cent and 7.6 per cent respectively,” Powell said.
However, despite rising rents, Adelaide remains the most affordable capital city for tenants.
“There is only a $5 difference between house rents in Adelaide and Melbourne. If the pace of rental growth continues, Adelaide could overtake Melbourne in coming months,” she said.
Darwin houses cost the same to rent as Sydney’s
In the last 12 months, house rents in Darwin have jumped 14.6 per cent to $550 a week, and unit rents have jumped 13.2 per cent to $430 a week.
It means tenants are spending $70 more a week renting a house and $50 more for a unit than they were 12 months ago.
“It costs the same to rent a house in Darwin and Sydney: rents have not been on par in these two cities since 2017,” Powell said.
“Darwin’s rental market may be making a swift recovery, however rents remain below the 2013 peak — houses are $150 lower and units are $140 cheaper.
“The sustainability of Darwin’s rental rebound is questionable considering short-term facts could be driving the revival in rental demand,” she said.