The Canberra regions with the highest rental growth: Domain data

Canberra renters wanting to seek respite over the border from the nation’s highest rents might not find much luck with data revealing rental growth in Queanbeyan has outpaced most Canberra regions.

According to Domain group, the median weekly rent for houses in Queanbeyan jumped 8.7 per cent over the year and 6.4 per cent over the past three months.

While it’s still one of the cheapest in the region, the median asking price of $500 is now on par with rents in Tuggeranong, and just $10 behind the Belconnen region.

The Inner South is the only region to record a higher rate of growth with house rents increasing by $100 per week in the 12 months to December 2018 to $750 per week – a year-on-year growth of 15.4 per cent.

House rents in Woden Valley have also rapidly increased by 8 per cent to a median asking price of $610 per week.

This comes after the latest Domain Rental Report for the December quarter found house rents in Canberra surpassed Sydney, with the median weekly asking rent for the nation’s capital sitting at $560 – an increase of 3.7 per cent over the year.

While ACT house rents are the highest in the nation, in the unit market the median asking price remains behind at Sydney at $465 per week. But unit rental growth over the year is more than double that of houses at 8.1 per cent.

Gungahlin apartments led the charge growing by 10.6 per cent, from a median asking price of $400 per week to $442.50.

Marc, who wished to not give his last name, said the rent for his Gungahlin unit has recently increased by $20 per week with the landlord increasing the cost to match the median price for the suburb.

“It’s quite expensive but it’s Canberra and you really don’t have much choice,” he said.

Weston Creek and Woden Valley units also experienced sharp rental increases at 9.8 per cent and 7.9 per cent respectively.

Queanbeyan unit rents jumped by 7.4 per cent but it still remains considerably cheaper than Canberra at $290 per week.

Across the housing and unit rental market, no Canberra regions experienced a decline in rents over the year.

Experts said the high costs were due to several factors.

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Hathaway Real Estate director Thomas Hathaway said increases to land taxes and rates were causing rents in the ACT to surge, particularly in the Inner South.

“The main contributor to higher rents is due to the ACT government’s increases to rates and land taxes … [and] the Inner South has some of the highest costs,” he said,

“The ACT is the most expensive city to rent a property and feedback from my investors is it’s one of the most expensive cities to own an investment property. Investors are being forced to either sell or pass these costs on to renters through rent increases or an increase when the property becomes vacant.”

Mr Hathaway said this has caused a flow-on effect to Queanbeyan with many people looking over the border, in turn creating higher demand.

“Many people and especially a lot of property managers I know are choosing to move to Queanbeyan, it’s more affordable than the ACT and more people are making the jump so I could see why rents would be increasing due to the demand,” he said.

Better Renting director Joel Dignam rejected claims land taxes were resulting in higher rents, he said population growth was the main driver. 

“I hear claims some of the rent increases are due to land taxes but these changes are happening due to supply and demand,” he said.

“If the government gave landlords a subsidy towards land tax, we wouldn’t see rents go down. Renters would still be trying to compete in this tight rental market.

“A driver for rent increases seems to be population growth with more people moving to Canberra … I am hearing of people going to inspections and being met with lines around the corner.”

Domain senior research analyst Nicola Powell said stock levels have dropped significantly, coupled with population growth.

“The market remains tight and challenging, as tenants are faced with a dwindling pool of rentals. House rental listings have been shrinking for three years and unit listings have declined for just over a year on an annual basis,” Dr Powell said.  

“This has resulted in a five-year low of advertised rentals for a December quarter, a concerning scenario given we’ve now entered the peak rental period.”