The Canberra suburbs where the property boom has spilled into the rental market

Canberra’s property boom has spilled over into the rental market, with median asking rents skyrocketing in the past year in the city’s most expensive suburbs, new data shows.

Tenants looking to rent a house in the capital’s inner-city suburbs will now be hard-pressed to secure a lease as cashed-up sellers who have recently sold their properties have joined the rental market in the short term.

The Domain Rent Report revealed that Deakin had the strongest rise in median asking rents of all Canberra suburbs, up 24.9 per cent over the year to $1000 per week – the most expensive suburb in which to rent a house.

This was followed by Campbell, up 20.8 per cent to $900 per week, the third most expensive suburb in the capital.

Domain chief of research and economics, Dr Nicola Powell, attributed the growth in these suburbs to the property boom that Canberra has experienced.

“Because there’s been such a shortage of stock in the housing market and intense competition amongst buyers, some people have sold their properties and are renting to buy themselves some time,” she said.

Property manager Claudia Dyball of inStyle Estate Agents said the current rental market was “like nothing she’d seen before”.

“It is a bit quieter than the start of the year but nothing like what we would see in a regular winter season,” she said.

Existing and out-of-area renters and priced out buyers were driving rent prices. But home owners vacating their properties to make way for renovations are also renting properties in the interim, Ms Dyball added.

Dr Powell said that the strong growth rates for house prices in both markets, compared to units, had forced tenants into renting a unit.

“Renters have come to the point at which, in certain suburbs, they’ll opt to rent a unit just to remain in the area they want,” she said.

For Hari Prinos and his fiance Tara Babu, this couldn’t be more true. 

The couple moved to the capital at the start of the year from Adelaide, where they rented a two-bedroom townhouse for $360 per week. They were previously renting a unit in Belconnen but wanted to move to the Inner South or Inner North for work.

“We thought moving to Canberra, that the prices would be similar because it’s a small city, but we realised really quickly, that wasn’t the case,” Mr Prinos said.

“We wanted a townhouse in Red Hill, Griffith or even in Braddon, but it was a lot more expensive than we budgeted for.”

The couple had an initial budget of $450 per week but recognised early on that it was “too conservative, so we progressively pushed that budget upwards”.

“We only recently got accepted for a two-bedroom unit in Kingston for $630 per week,” he said.

“We’re paying a lot more than what we paid for in Adelaide for something a lot different, but if we wanted to get something in the location we wanted that had at least two bedrooms, we had to increase our budget.”

Should the option of extending his lease appear, Mr Prinos is very likely to extend his contract to avoid the search for another rental property.

“I don’t ever want to be in that position ever again,” he said.

“You’d think having a secure job would make you look like an attractive applicant, but we were looking for something for months on end with multiple rejections. It’s just tiring.”