Despite the 'old school' investment preference for houses, units appear to be growing in strength by comparison, according to new data released today.
The Australian Property Monitors' (APM's) Rental Price Series Quarterly Report has seen strong unit rental prices across Sydney and Perth, while median asking rents for houses have been less impressive.
While national median asking rents for units jumped by 0.5 per cent over the quarter, for houses they sank by a further 0.5 per cent over the same period.
In Perth, houses recorded growth of 1 per cent, but were the only capital to receive a positive result for houses. Unit rents in Perth soared by 6.3 per cent, bringing the current median asking rent to $490 per week. For Sydney, this figure sits at $500.
Sydney rents for houses remained flat, with no increases over the June quarter, while unit prices jumped by 1.1 per cent (and 2.2 per cent over the year).
“The trend we’ve been seeing this year has continued as unit prices in Sydney outperform houses, while rental prices for both houses and units have skyrocketed in Perth,” said Andrew Wilson, senior economist at APM.
“Affordability constraints in these markets are motivating tenants to gravitate towards cheaper unit accommodation. However, the consequence of this of course is that the difference between house and unit rents in these cities is converging.
“The good news for other capital markets is that rental growth is expected to remain subdued over the remainder of 2013 as low interest rates help drive increased activity from first home buyers, investors and home builders reducing demand and increasing supply,” he said.