‘We’ve given up now’: Canberra’s booming rental market pushes home ownership dreams further

The cost of renting in Australia’s capital has made home ownership an unattainable dream for many after new data revealed that Canberra remains the most expensive city in which to rent a house or a unit.

The Domain Rent Report for the March quarter, released on Thursday, showed that the median asking price for a house in the capital hit another eye-watering milestone of $700 per week, up 3.7 over the quarter and 16.7 per cent year-on-year. This was the steepest annual gain since 2007.

The median asking price for a unit also hit a new record of $540 per week, up 1.9 per cent over the quarter and 8 per cent year-on-year.

The bush capital has yet again trumped rental prices in Sydney, where the median asking rent for a house sat at $600 per week and $500 per week for a unit.

“Canberra is the nation’s most expensive capital city to rent since late 2018 for houses and late 2020 for units,” said Domain chief of research and economics Nicola Powell.

“The city has seen house rents grow at double the pace of units over the past year, creating a record price gap between property types. This has been an unusual trend as the annual growth in house and unit rents have had a tendency to follow one another relatively closely.”

Dr Powell noted that Canberra was the only capital city to have a record price gap between house and unit rents.

“The thing with Canberra’s rental market is that it is a tightening market,” she said. “Most recent data showed the city had an all-time low vacancy rate of 0.5 per cent in March and February … we saw this bounce back during the short lockdown last year but overall, we’ve seen that figure trend down.

“The undersupply of rental properties is a continual problem, as demand has perpetually outstripped supply.”

With high holding costs and land taxes in Canberra, Dr Powell said it was not unusual for landlords to pass these fees on to their tenants.

The record rent prices for a house in the capital have seen many tenants opt for a unit instead, according to property manager Heidi Russell of Little Bird Properties, a property management business.

“Previously, we’d have tenants whose preference was a house, but that has changed now,” she said. “We’re finding that people are a bit more open on what they want to live in now because they’re considering different options, not just from a price point perspective but on a property’s availability.

But downsizing to a unit was no option for Gungahlin resident Natalia Symes and her family of four.

Ms Symes was renting a three-bedroom townhouse in the Gungahlin region for $510 per week but her landlord decided to sell and she was given eight weeks’ notice to find a new rental property.

“The two townhouses next to ours, with the exact same floor plan, recently got leased out for $610 per week, and after hearing that, we knew that we had to increase our budget,” she said. “What I didn’t anticipate was our budget to increase by almost $200.”

Ms Symes only recently signed a new lease for another home, within the same region, for $690 per week. 

“We didn’t want to move outside of Gungahlin because my son goes to school nearby so if we moved elsewhere, there would’ve been more costs involved to buy new uniforms, school fees and so on,” she said.

If Ms Symes could turn back time, she would’ve liked to purchase something before the property market boomed, which eventually spilled into the rental market.

“The timing was never right … and in all honesty, we’ve given up now, given up on ever buying a house,” she said.

“We had a bit of a house deposit saved pre-pandemic but then my husband got made redundant during COVID and has been in and out of jobs since and so we had to dip into that savings account.

“I’m now back in the workforce part-time and raising two kids … and with the cost of living rising, not to mention the cost of rent, it’s just impossible. It takes a good chunk out of our wages.”

Ms Russell noted that many tenants had opted to move further away from the capital towards Queanbeyan, in search of some affordability respite.

According to the data, Queanbeyan recorded a median asking rent of $620 per week for a house, up 3.3 per cent over the quarter and 19.2 per cent year-on-year – the second strongest yearly increase of all Canberra regions for house rent prices, after Weston Creek.

For a unit, the median asking rent was $370 per week, up 5.7 per cent over the quarter and 15.6 per cent year-on-year – the strongest yearly growth for unit rent prices in Canberra.

“Queanbeyan has always been considered the affordable town outside of Canberra so that has definitely been popular in recent months as tenants searched for cheap rentals,” Ms Russell said.

“In saying that, tenants are looking for properties all over, especially homes with a bargain.”