Rents rising fast in Canberra: report

While most Australian tenants welcomed steady or falling rents last quarter, Canberra renters faced price rises.

Domain’s latest rental report, released on Thursday, also showed that Canberra’s unit yields were among the highest the country, making ACT investors the big winners of the past quarter. 

Canberra’s median rental prices climbed to $400 a week for units and $475 for houses. This represents a 1.3 and 2.2 per cent quarterly rise for units and houses respectively – a larger increase than any other capital city.

Sydney’s median unit rental price climbed 1 per cent in the quarter, while house rentals remained steady. All other capital cities across Australia recorded steady or falling unit rental prices.

Year-on-year growth was also recorded in Canberra, with unit rents up by 3.2 per cent and houses up by 5.6 per cent.

Rental yields in the ACT remained strong, particularly for units. Canberra was the only city to record a year-on-year rise in unit rental yields, while all others experienced a decline.

Canberra’s unit rental yields rose 5.6 per cent over the past year to a median of 5.58 per cent.

Allhomes data analyst Nicola Powell said rental conditions had been tightening throughout the year.

“It is due to the sliding number of new stock, which has been declining significantly since the middle of 2015,” Ms Powell said.

“The tighter lending restrictions on investors could be to blame. Rental demand has remained relatively consistent adding further stress to the tightening conditions. Shrinking stock levels and a relatively consistent demand level has created the perfect conditions for price hikes.”

Domain chief economist Andrew Wilson said vacancy rates remained tight, suggesting rents could continue to rise in the near future.

Canberra had the second lowest vacancy rate at 1 per cent, while Hobart topped the list with a vacancy rate of 0.6 per cent.

However, Dr Wilson said more stock on the horizon could provide long-term relief for renters in the nation’s capital.

“Although house vacancy rates remain low, the new crop of apartments in the city could be set to ease vacancy rates and give tenants welcome relief,” he said.

As vacancy rates ease, tenants are advised to keep an eye on the market.

Imogen Featherstone has lived in inner-north units for four years and has managed to avoid rising rental costs.

She was granted a rental decrease when she discovered her neighbours were paying significantly less.

Ms Featherstone advises other tenants to keep a watchful eye on similar rental listings and talk to their neighbours to ensure they’re paying a fair price.

“It’s up to tenants to say if they want a rent reduction,” Ms Featherstone said.

“They need to be savvy about it and not afraid to ask.”