Canberra rents stagnate but still the most expensive capital city to rent a house

There has been no change to Canberra’s median weekly asking rent but renters in the territory are continuing to pay the highest price for houses across the capital cities.

Canberra’s median weekly asking rent for houses has stabilised at $550 per week, Domain’s latest rental report showed. There was no change to units over the quarter with the median staying at $470 per week, but year-on-year this is up 4.4 per cent – or $20. 

House rents remain the most expensive of the capital cities with the gap between Sydney and Canberra’s median further widening. The weekly asking rent for houses in the harbour city dropped 0.9 per cent – or $5 – over the quarter to $525. 

But both markets are at a turning point and this could result in the gap closing, according to Domain research analyst Eliza Owen.

“For Canberra, the rental market is at a point where it is turning – a lack of movement in rent prices suggests rents might be coming to a peak point,” she said.

“In Sydney, rental vacancies are starting to tighten and investor activity has slowed right down.

“Sydney rents are sitting at their biggest annual decline on record but I believe that will start to change over coming quarters and that rent prices will start to rise again.

“With Sydney prices on the cusp of an upswing and Canberra rents potentially on the cusp of a downswing, it is likely the price gap will start to close.”

Canberra house rents first overtook Sydney at the end of 2018, but the median unit rent in the nation’s capital is still behind Sydney’s $520 per week.

Ms Owen pointed to Canberra’s increased vacancy rate, up 50 basis points year-on-year to 1.1 per cent, as an indication that rental prices could ease in the territory.

“It’s low relative to the national figure, but it is almost double what it was this time last year so there are more properties available for tenants,” she said.

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The market is shifting to be favourable to tenants, McGrath Gungahlin director of property management Jessica Talbot said.

“We have definitely seen fewer people through open homes than usual,” she said.

“The way I would describe it is it’s more of a tenants’ market at the moment and it means owners have to be realistic about the asking rent.

“I think that will continue for a while with the new developments that will be finished.”

It comes as the ACT is one of only two states or territories to record a rise in annual housing starts in Australian Bureau of Statistics figures released on Wednesday. Canberra was up 17.8 per cent over the 2018-19 financial year.

“We have projected a gradual increase in detached housing over the coming years and that growth certainly supports keeping a lid on rents which is positive for renters,” Housing Industry Association ACT executive director Greg Weller said.

Mr Weller said the growth in apartment rents suggested the ACT was not in a position of having too many units.

On a district level, over the past 12 months within the ACT house rents in Belconnen jumped the most up 4 per cent – or $20 – to $520 per week. Woden Valley houses were the only place where house rents fell down 2.5 per cent – or $15 – a week. 

For units, rents in every district besides Woden Valley increased. The weekly asking price for Inner North units is up 6.5 per cent – or $30 – year-on-year to $490 per week. Gungahlin units are not far behind, up 6 per cent – or $25 – to $445 per week. 

Mr Weller said the light rail could possibly be a contributor to increases in the Inner North and Gungahlin.

But rent increases have been felt hardest over the border, in Queanbeyan, where rents for both houses and units have skyrocketed. The median weekly asking rent for houses in Queanbeyan has jumped 6.4 per cent – or $30 – to $500 per week, on par with Tuggeranong. 

While unit rents across the border are much lower than Canberra, year-on-year they have increased by 7.1 per cent – or $20 – to $300 per week.