Asking rents remain flat nationally, Hobart and Canberra post growth

While asking rent prices in most of Australia’s capital cities remained flat over the quarter and year-on-year, prices in Hobart continue to steamroll ahead.

The Tasmanian capital has witnessed unprecedented demand, which has been underscored by rising house prices – which grew a whopping 17.3 per cent last year – and the price of rent.

Asking rents for apartments in Hobart rose 12.5 per cent since this time last year and 2.9 per cent over the quarter, to $360 a week, according to the latest Domain Rental Report.

The median asking rent for houses jumped 13.9 per cent year-on-year, although it did post a 2.4 per cent dip from last quarter’s results.

Asking prices in the Canberra rental market also increased with 10 per cent growth for houses year-on-year. Its median house rental is now $550, making it equally as expensive as Sydney. Over the year, rents for apartments grew by 7.1 per cent.

Domain data scientist Nicola Powell said from a national perspective, there was a general slowdown in rental growth led by Sydney and Melbourne.

“It’s a trend typical of the second quarter”, she said. “But overall we are seeing that pace of growth slow.”

The smaller Canberra and Hobart markets remained tight, she added, with Canberra house stocks at a five-year low, and unit stock at a two-year low.

Dr Powell identified Newcastle – in particular Newcastle units – as one area of surprising growth.

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“It’s illustrative – we are seeing those regional areas outperforming capital cities,” she said. “But Newcastle itself is going through a transformation, they’re seeing a lot of of infrastructure projects and development.”

Certain regional areas on the east coast have posted strong growth, both across the quarter and the year.

The median house rental price in Tweed Heads and Murwillumbah increased by 8.2 per cent over the year and 6 per cent over the quarter.

Byron remains the most expensive New South Wales regional area for rentals, with the median for houses holding steady at $650.

In Victoria, both Ballarat and Greater Bendigo experienced rental price growth for houses – over the quarter and the year – with the median house rent now $310 for Ballarat, and $315 for Greater Bendigo.

Greater Geelong, with a median for the June quarter of $370 rent a week for a house, posted 5.7 per cent growth over the last year.

In North Queensland, two mining cities stood out for their jump in asking rents.

Rents grew by 16.7 per cent over the year in Mackay, which is experiencing positive economic development off the back of the mining and sugar industries.

The regional centre has an unemployment rate of 3.6 per cent – the lowest in Queensland, well below the state average of 6.1 per cent – and the market is recovering from the drop at the end of the mining boom.

Sally Richards, at Elders Real Estate Mackay, has seen an increase in tenants coming to look at rentals.

“Properties are not on the market for very long at all”, she said. “We’re even getting tenants saying that it’s hard to get a rental property, that they’re missing out on a few.”

“There is a lot more confidence in mining and what is happening in the region,” she said, explaining that many people were returning to the area, drawn by affordability.

Gladstone also returned 9.1 per cent growth over the year for houses, with 4.3 per cent over the last quarter.

Regan Atrile, from valuers Herron Todd White’s Gladstone office, said the current growth was being driven by affordability, with vacancy rates down.

“We have gone from one of the dearest places in the state to one of the cheapest”, he said, saying Gladstone was drawing residents from more expensive nearby towns.

The biggest drops in asking price for rents were posted in Darwin – where the asking rent for houses was down 3.8 per cent over the year and 6.5 per cent over the quarter. Apartment rents also slipped 2.4 per cent over the quarter.

Perth is now the cheapest capital city to rent a house, with the asking rent sitting at $350.