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

Canberra has continued to lead the nation as the most expensive city to rent a house, according to the Domain Rental Report for the March quarter 2020 released on Thursday, despite economic uncertainty looming in the rental market.

The latest rental report showed Canberra’s median weekly asking rent for houses remained unchanged from the previous quarter at $580, up 1.8 per cent year-on-year.

The median weekly asking rent for units was the second-highest of all capital cities, after Sydney, but also flatlined over the quarter at $480, up 3.2 per cent year-on-year. 

“There’s been little relief for tenants in Canberra because we have house rents and unit rents at that record high which was achieved last quarter … rents have been growing annually for four-and-a-half years,” said Domain senior research analyst Dr Nicola Powell.

“The first quarter of the year is usually the strongest in terms of growth because it’s the busiest time of the year. I think for Canberra that happened in December, rather than March. 

“So, what we’ve seen is that strength has remained over this quarter and rents remained the same.”

While the average number of weekly rental listings climbed by 19 per cent across the nation over the last two weeks of March compared to last year, due to the economic impact of COVID-19, the ACT saw a 9 per cent drop.

“Unlike other states and territories, Canberra is yet to see a substantial lift in new rental listings over recent weeks [compared to the same period last year],” said Dr Powell.

“During a crisis, the younger generation is more likely to consolidate houses and move in with relatives. Given the current situation is unprecedented, if rentals become vacant in large numbers, it could result in rent prices falling.

“We may see that trend [be delayed] in Canberra and if we do start to see vacant rentals increase, we could see rents ease but at the moment that’s not the case in Canberra.”

Domain data showed that the average number of weekly rental listings in the ACT increased by 29 per cent between March 16 and 29 compared to the four weeks prior with 483 new listings – the second-highest growth in the nation, after Tasmania.

One Canberra resident, Ronise Niko, is willing to put a pause on her rental search until the COVID-19 pandemic passes.

When Ms Niko lived in a one-bedroom apartment in Belconnen from 2016 to 2017, she was paying $360 per week. She then moved to Brisbane in 2018 and found a three-bedroom standalone house for the same price.

“The process of securing a rental property was very long [in Canberra] because the demand was quite high,” Ms Niko said.

“But when we moved to Brisbane, where we stayed until late last year, we were able to find a house for the same price but with more space and bedrooms … I imagine the rental market wasn’t as high in demand in Brisbane as it was in Canberra because the process of securing a rental home was a lot easier and smooth.”

According to the figures, Brisbane’s median weekly asking rent for a house was $410. That’s $70 less compared to renting a unit in Canberra.

Since moving back to the capital in January, Ms Niko has been looking in the Belconnen, Woden Valley and Tuggeranong regions but decided to put a halt on her plans.

“While there may be more homes on the rental market now, I’m not sure whether [the federal government] will announce more job cuts. I would rather wait it out until prices could potentially drop further … the economy is quite uncertain at the moment,” she said.

Property manager Marie Bailey of Blackshaw Gungahlin recently leased 79 Mary Gillespie Avenue, Gungahlin, less than a week after the townhouse was withdrawn from the sale market and listed as a rental home.

“The property was under offer, however, with the uncertainty of employment due to COVID-19, the buyer decided not to proceed with the purchase and the vendor made the decision that it might be better to relet at this time,” Ms Bailey said.

Ms Bailey noted that while some properties had successfully sold in recent weeks, despite the restrictions put in place for traditional auctions and open homes, the rental market in Canberra had not seen a major change.

“Potentially the balance is made up of the fact that many tenants who would normally vacate are not, so we are seeing less turnover of current rentals even with the minor addition of some sales properties converting to rent,” she said.

“Canberra is a really transient state, we have a lot of people moving to and from Canberra all year round.  With the current COVID-19 pandemic, we are noticing tenants are not wanting to move due to several factors – loss of employment, self-isolation and financial stress of moving. 

“Perhaps it is too soon to see the true effect [COVID-19] will have on the market in the long term.”

On a district level, the report showed that Tuggeranong was the most affordable region to rent a house at $520, up 2 per cent over the quarter and year.

The most expensive region to rent a house remains in the Inner South at $750, unchanged over the quarter and year.

Woden Valley had the biggest growth in house rent, up 6.8 per cent compared to the last quarter and 5 per cent over the year to $630 per week. 

In the unit market, most regions remained unchanged over the quarter, except for Belconnen at $450, up 2.3 per cent.

The most affordable region to rent a unit is in Greater Queanbeyan at $300 per week, while the most expensive region to rent a unit is the Inner South at $525 per week.