This suburb has the highest and fastest rental growth of anywhere in Australia

The Brisbane riverside suburb of Teneriffe has taken its place as the country’s most sought-after suburb in which to rent, with rents skyrocketing by almost 50 per cent over the past 12 months.

The latest Domain Rent Report shows Teneriffe’s median asking rent for a house is now at $963 a week, up 48.1 per cent year on year – the strongest annual growth of anywhere in the nation.

This was followed by houses in Glendalough in Perth at $585 a week, up 46.3 per cent; units in Hillsdale in NSW at $650 a week, up 44.4 per cent; and units in Ivanhoe East in Victoria at $580 a week, up 43.2 per cent. 

Kieran Kannan of Odyssey Property Concierge says he was not surprised by the growth experienced in Teneriffe, noting that the demand was simply driven by low supply.

“There’s just not enough stock,” he says. “People want to live in the area and are prepared to pay $200 more a week for an apartment here, whereas a replica apartment in another suburb would be $200 less. When things come on the market, people rush to secure it.”

For an apartment in Teneriffe, tenants can expect to pay $680 a week – up 18.3 per cent year-on-year.

Sarah Hackett of Place Estate Agents New Farm says the rental market is being driven by a younger demographic.

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“There’s a lot of restaurants there and it’s accessible … a good lifestyle precinct, entertainment and even fitness facilities,” she says. “It’s the number one hotspot at the moment.”

Massive rental demand in Teneriffe is rippling out to neighbouring suburbs, pushing prices up in those areas too, agents say.

Houses in Fortitude Valley and Newstead, just minutes from Teneriffe, have a median asking rent of $670 a week, up 42.6 per cent, and $510 a week, up 2 per cent year-on-year, respectively.

In nearby New Farm, one of Brisbane’s most sought-after suburbs, the median asking rent for a house is $850 a week, up 20.6 per cent year-on-year.

“It’s a flow-on effect,” Hackett says. “Newstead, for example, will closely follow the trends in Teneriffe for rentals because it offers a similar lifestyle.

“Teneriffe, Newstead and New Farm have had major lifestyle upgrades so a lot of people want to live there.”

Many sellers have offloaded their investment properties to take advantage of the property boom, creating an even tighter rental market in Teneriffe and surrounding suburbs, she adds.

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“Investors were getting money they didn’t think they’d get,” Hackett says. “About 20 per cent of our portfolio sold, and when you have 3000 properties to manage, that’s hundreds being put up for sale so there’s definitely been fewer properties available in the rental market.”

According to Pricefinder, Teneriffe’s median house price is $3.05 million, based on sales in the suburb in the last 12 months.

While Kannan believes rental prices will continue to increase, he expects a slowdown in the pace of growth.

“I don’t think it’ll increase at the same rate,” he says. “Teneriffe is a great place to live in for those who can afford to live there but I am conscious that a lot of people are priced out of these lifestyle suburbs.

“It’s great for investors, [but] tenants are being pushed further out of this area because of rising rents. But Newstead has a few big developments going up and, given that’s a neighbouring suburb, I do think that’ll take some pressure off Teneriffe’s high rental prices.”