With properties values now on the rise, the strongest feature of the property market has been the exceptional growth in weekly rental rates across houses and units.

 

All property types across each capital city excluding Hobart recorded growth in weekly rental rates through 2008. On average, rents increased by $41/week for houses and $35/week for units, indicating very strong rental growth.

 

Sydney has been the second standout city performer in the country in terms of rental growth where the median house rents increased by 18% over the year and unit rents climbed by 14%. 

 Change in Capital City median rents December 2007 vs December 2008

Capital City	Property Type	2007	2008	Change
Sydney	Houses	$380	$450	$70
	Units	$350	$400	$50
Melbourne	Houses	$300	$350	$50
	Units	$280	$320	$40
Brisbane	Houses	$320	$350	$30
	Units	$300	$335	$35
Adelaide	Houses	$275	$390	$15
	Units	$240	$250	$10
Perth	Houses	$320	$360	$40
	Units	$280	$310	$30
Darwin	Houses	$400	$470	$70
	Units	$320	$380	$60
Canberra	Houses	$420	$435	$15
	Units	$350	$370	$20

Source: RP Data

Several regions performed strong during 2008 in terms of rental growth throughout Australia’s Local Government Areas (LGA’s).

A shortage of supply of housing is the main reason behind the top three regions having enormous growth in rents through 2008.  The top three spots are held by mining and resource areas with Belyando and Broadsound LGA’s in the Central Qld mining areas and Port Hedland situated in Pilbara Region of WA.

Apart from the mining and resource regions wealthier precincts of inner Sydney and inner Perth have observed weekly rental rates soar.

The results demonstrate that quality inner city property will carry on with strong long-term demand for both owner occupation and rental occupation.

Top rental growth LGA’s - Houses

LGA	State	2007	2008	Change
Belyando	QLD	$600	$1100	$500
Port Hedland	WA	$800	$1150	$350
Broadsound	QLD	$600	$790	$190
Mosman	NSW	$920	$1100	$180
Duaringa	QLD	$350	$500	$150
Woollahra	NSW	$750	$893	$143
Cambridge	WA	$520	$650	$130
Ku-Ring-Gai	NSW	$700	$800	$100
North Sydney	NSW	$550	$650	$100
Waverley	NSW	$600	$700	$100
Exmouth	WA	$320	$420	$100
Mosman Park	WA	$600	$700	$100

Source: RP Data

The unit markets list is almost exclusively populated by inner city areas and high quality waterfront districts close to CBD’s. The two exceptions are Kalgoorlie-Boulder which is a mining area in WA and Bassendean located to the east of the Perth CBD.

 Top rental growth LGA’s - Units

LGA	State	2007	2008	Change
Nedlands	WA	$290	$420	$130
Bassendean	WA	$240	$340	$100
Darwin	NT	$330	$400	$70
East Fremantle	WA	$255	$325	$70
Kalgoorlie – Boulder	WA	$255	$325	$70
Botany	NSW	$290	$355	$65
Manly	NSW	$490	$550	$60
City of Sydney	NSW	$400	$460	$60
Randwick	NSW	$400	$460	$60
Cottesloe	WA	$390	$450	$60
Subiaco	WA	$320	$380	$60

Source: RP Data

During 2009 it is predicted that rental growth will continue to be strong, however it may be weaker than the last 12 months. Rental vacancy rates all over the country remain tight and even though the Government is offering attractive boost grants for first home buyers, many however, remain unable to finance a purchase on a property due to tighter lending conditions.

Real Estate Institute of Australia (REIA) recent data shows the low vacancy rates throughout all Australian capital cities except Perth (2.4%) and Canberra (2.3%) remain below 2%.

 

The ongoing under supply of dwellings all over the country is likely to result in tighter rental markets and additional upwards pressure on rental rates. This will be mainly felt in capital city markets and attractive inner city locations.

Your Name Email Address Comment Image Validation Text