Rent prices hit record highs in most capital cities

author-avatar By on July 08, 2021
Rent prices hit record highs in most capital cities

Rental prices in many capital cities have soared over the past year, with one capital city recording the biggest increase in almost 15 years.

National average house rents have soared 5.9% over the past year to a record $477 per week.

Domain's Rental Report for June 2021 shows the median weekly asking price for houses reached record highs in Sydney, Adelaide, Hobart, Canberra, and Brisbane.

Unit rental prices weren't far off either, also reaching record highs in Brisbane, Canberra, Perth, and Adelaide.

House rental prices June 2021

Capital City Jun-21 Mar-21 Jun-20 QoQ YoY
Sydney $550 $550 $540
0.0%
+1.9%
Melbourne $430 $430 $430
0.0%
0.0%
Brisbane $450 $440 $400
+2.3%
+12.5%
Adelaide $430 $425 $395
+1.2%
+8.9%
Canberra $630 $600 $570
+5.0%
+10.5%
Perth $450 $430 $370
+4.7%
+21.6%
Hobart $495 $480 $450
+3.1%
+10.0%
Darwin $593 $550 $490
+7.7%
+20.9%
National $477 $471 $450
+1.2%
+5.9%
Source: Domain

Unit rental prices June 2021

Capital City Jun-21 Mar-21 Jun-20 QoQ YoY
Sydney $470 $470 $500
0.0%
-6.0%
Melbourne $365 $375 $415
-2.7%
-12.0%
Brisbane $400 $400 $380
0.0%
+5.3%
Adelaide $350 $350 $320
0.0%
+9.4%
Canberra $500 $500 $470
0.0%
+6.4%
Perth $380 $370 $320
+2.7%
+18.8%
Hobart $400 $420 $380
-4.8%
+5.3%
Darwin $450 $430 $380
+4.7%
+18.4%
National $427 $429 $451
-0.6%
-5.4%
Source: Domain

It comes after recent figures from Domain found that rental vacancy rates plunged to their lowest ever recorded point in June 2021.

Canberra remains the most expensive city to rent both a house and unit.

The average asking price for a house in the nation's capital rose to $630, up $30 from the March quarter. The median unit rent remained unchanged at $500.

"This sharp rise in house rents is unsustainable against a backdrop of weak wages growth that is unable to support ongoing increases in rent," said Domain senior research analyst Dr Nicola Powell.

Darwin also recorded a significant bump in rental prices where it now costs $593 to rent a house, a 20.9% increase from the year before. Unit prices weren't far behind, up 18.4% from this time last year to $450. 

In Brisbane, the median house rent climbed 12.5% over the past year to $450, marking the strongest rate of annual rent growth in almost 15 years. Apartment prices were also at a 10-year high in Brisbane at $400.

"Tenants are operating in rental conditions that haven’t been experienced in more than a decade," Dr Powell said.

Dr Powell also noted that Brisbane has become a growing destination of choice for those moving interstate.

"Landlords are clearly cashing in on improved household budgets and increased interstate demand to boost yields. However, wages growth is unable to support ongoing increases in rent," she said.

"Tenants with leases expiring will need to brace for a jump in rent as landlords capitalise on the tight rental market."

Sydney's rental market remained stable, with the median weekly asking house rent remaining unchanged in nine months, and six months for units.

"Though tenants have avoided rising rents, prices are unlikely to fall again and it could signal a turning point in Sydney’s rental market with vacancy rates returning to pre-pandemic levels of February 2020," Dr Powell said.

While the rental market has been more subdued in the city, Dr Powell said rents have been rising in regional locations.

"Remote working has encouraged tenants to shift to the outer suburbs or lifestyle locations within Greater Sydney," she said.

"Rents for houses and units hit record highs over the June quarter in the Northern Beaches, Central Coast and outer west and Blue Mountains, while houses are at peak prices in Sutherland, the outer south west and Baulkham Hills and Hawkesbury region."

In Melbourne, the average weekly asking rent for a house is $430 per week, which puts the city on par with Adelaide.

Unit asking rents in Melbourne dropped by a further $10 over the June quarter to $365 a week, which puts rents back at 2015 levels. 

"This is the steepest downwards adjustment in unit asking rents that Melbourne has ever recorded," Dr Powell said.

"This is providing tenants with an opportunity to negotiate rent or shift to an area that has experienced significant reductions."


Photo by Peter Burden on Unsplash

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author-avatar
Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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