If trends are anything to go by, Melbourne is on the way to becoming the most affordable of Australia’s capital cities to rent a house or residential unit, according to Domain’s March quarterly report on rents in Australia that was published on 15 April.
According to the report, Melbourne along with Perth are the cheapest cities in which to rent after Adelaide. Canberra remains the most expensive capital city.
The report shows that Australians are still adjusting to the shock of COVID-19 lockdowns with a large shift showing in preferences for houses over residential units and for out-of-city areas over cities, and for some capital cities over others.
It is now more expensive to rent in Brisbane than Melbourne – the first time this has happened in five years. On average, house rents have increased by $30 to an average of $440 a week. Residential units in the Queensland capital at $400 a week, are $15 up on last year’s figures.
Domain senior research analyst Nicola Powell told MSN News that in the coming months Brisbane tenants were likely to have less choice as the pool of available rents was reduced by a third compared to last year.
She said that Queensland was traditionally the preferred location for people moving from other states and added that the COVID-19 pandemic would have accelerate decisions to relocate. The number of people moving to Queensland from other states was the highest since 2006.
Canberra remained the most expensive city to rent with the average rental for a house being $600 a week and residential units renting for $500 a week.
It cost $50 a week more to rent a house in the ACT capital than in Sydney and $30 more to rent a unit, with the vacancy rate falling to 0.7 percent in March.
In Melbourne, average house rents were $430 a week, having fallen by $10 a week on the previous quarter. For residential units, the rents had fallen $10 to $375 in the March quarter – making it 12 consecutive months of falling rents.
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There were, however, variations within the city with the rents for houses at record highs in Melbourne’s outer east, south east and the Mornington Peninsula.
“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,” Dr Powell was quoted as saying.
“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.”
In Perth, rents have continued to rise in the March quarter – the Western Australian capital city has seen the highest annual jump of all of Australia’s capital cities with house rents up by 14.7 percent to $30 week on a year ago and unit rents up by 14.1 percent to $365. At present Perth’s rental prices are on a par with Melbourne but are set to rise.
These figures are still below the 2013 peak when house rents were $60 higher and unit rents were $85 more.
House and unit rentals in Sydney remain steady in the March quarter with units renting for an average of $470 a week after a record nine-month decline of 9.6 percent last year. House rents are at record high of $550 a week which is 3.8 per cent higher than a year ago.
Dr Powell the rental market in Sydney varied according to the property type and the location.
In the Tasmanian capital, Hobart, rents went up by $20 in this quarter with house prices reaching record levels and unit rents catching up to the record levels of a year ago. Average house rents are $480 a week and units rent for $420 a week.
Adelaide is recording increasing house rents to an average of $425 a week, up $1. Unit rents were now $350, up by $10 a week. The South Australian capital was still the most affordable city in the country despite the record increases in rent.
Rentals in Darwin are on a level with Sydney with house rents having gone up by 14.6 percent to $550 a week and residential unit rentals have jumped 13.2 percent to $430 a week.
Renting a house in Darwin cost $70 a week more than 12 months ago and units cost $50 more.