The suburbs where rents are rising, bucking the broader trend

While median rent prices have fallen in most capital cities amid the pandemic, some landlords around the country can breathe a sigh of relief.

A string of suburbs are bucking this trend and have seen an increase in asking prices, some by over 30 per cent, new figures show.

While the property market has been challenged by the coronavirus pandemic and resulting lockdowns, job losses and interstate and international border closures, not all areas have been affected by the downturn.

The West Australian mining town of Karratha recorded some of the biggest increases in asking prices, with suburbs Millars Well, Pegs Creek and Nickol up 37.5 per cent, 35 per cent and 27.5 per cent respectively over the year to June, according to the latest Domain Rent Report.

Queensland’s Kurrimine Beach near Cairns saw the second largest jump in the median rental asking price, by 37.1 per cent, with rents now at $480 a week.

“What we’re seeing are areas that haven’t been as economically impacted as others – those areas that are less exposed to a drop in the foreign student population and overseas migration,” Domain senior research analyst Dr Nicola Powell said.

“Landlord conditions are much better for investors in these areas that have remained steady or grown.

“For tenants, it just highlights the multiple speed markets across our cities,” Dr Powell said.

Some of the biggest increases in house rents were in WA’s mining towns, showing that WA seems to have bucked the trend in comparison to other states and territories.

“Growth is in regional areas, resource towns. The resources sector is helping to boost rent in these areas – demand has increased, which has helped to push up the rent price,” Dr Powell said.

Elsewhere, one of Perth’s most expensive suburbs, Peppermint Grove,  saw a jump of almost 17 per cent, with median asking rents now at $900 a week.

“Out of all rental markets, greater Perth was one of the strongest this quarter,” Dr Powell said.

“The rental market is a leading indicator of where the sales market is going to go. The market is on the road to recovery and is being led by the upper end.”

Top 10 WA suburbs annual change in median rent, houses

Source: Domain Rent Report, June quarter 2020

On the east coast, suburbs in Sydney’s northern beaches saw rents jump by as much as 30 per cent as more holiday accommodation and Airbnbs came onto the rental market and landlords tried to secure tenants as border closures put a stop to tourism.

Palm Beach rents gained 29.8 per cent while Narrabeen added 19.1 per cent.

“Landlords during this period have had to rethink their investment strategy quickly and are converting properties to medium- or long-term rentals,” Dr Powell said.

“Landlords have had to be agile and try their luck to see what they can get during this turbulent time.”

She said fully furnished elite holiday homes coming onto the market in these areas would command a higher price tag and had contributed to the higher price point.

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As travel restrictions ease, Dr Powell is tipping an increase in demand for short-term rentals around the country as more Australians spend their holidays at home. Some properties are set to revert to short-term holiday lets, she said.

Top 10 NSW suburbs annual change in median rent, houses

Source: Domain Rent Report, June quarter 2020

In Victoria, suburbs that have seen the highest jumps have been in Melbourne’s inner ring, with Hughesdale, near shopping mecca Chadstone, recording a rise of 22.9 per cent and median rent at $590 a week.

Dr Powell believes this is due to a change in what renters are looking for.

“Renters have had to tighten their purse strings during this time. They can’t afford a unit on their own so are looking at share houses to cut costs. This could be one of the reasons that are driving demand for houses in these areas,” she said.

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Although the unit rental market in Melbourne’s CBD has been weak, Geelong CBD’s apartment rents soared 20.6 per cent over the past year. The Geelong suburb of Hamlyn Heights also recorded a 22.1 per cent jump in unit rents.

“The Geelong area has become a drawcard for many looking for a better lifestyle – affordability, shorter commute times – and [the] rental market is obviously part of that as well,” Dr Powell said.

Top 10 VIC suburbs annual change in median rent, houses

Source: Domain Rent Report, June quarter 2020

Despite Canberra rental prices sliding over the last quarter, the nation’s capital has seen less of an impact than other cities

Garran, Farrer and Mawson, suburbs in the ACTs Woden Valley, saw rises over the past year of 15.8 per cent, 12 per cent and 9.4 per cent respectively and offer great affordability compared to suburbs in the inner south and inner north.

“It is very central and the demand for a more affordable family rental is there. It offers affordability and commutability – it’s family heartland,” Dr Powell said.

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Top 10 ACT suburbs annual change in median rent, houses

Source: Domain Rent Report, June quarter 2020

Kurrimine Beach, a picturesque beachside village in far north Queensland, saw rents increase by 37.1 per cent over the past year, with many short-term rentals now available for a median asking price of $480 a week.

“The sales market has slowed in terms of turnover [as] people offer homes to the rental market, ” Dr Powell said.

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Top 10 QLD suburbs annual change in median rent, houses

Source: Domain Rent Report, June quarter 2020