Unit rents catching up to houses
It’s only a matter of time before median unit and house rents are at the same level, according to one economist.
Speaking with Smart Property Investment's sister publication, Residential Property Manager, senior economist at Australian Property Monitors Dr Andrew Wilson said the flattening rental market was allowing unit rents to catch up.
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“An interesting thing we’re seeing in Sydney is that the median asking price for houses in Sydney is remaining flat, but we’re seeing growth in the median asking rents for units," he said.
“We’re getting a convergence, and I think that sooner rather than later we’re going to see rents for units and houses at the same level.”
According to Dr Wilson, demand for the high-density unit lifestyle has been growing in popularity, while affordability issues have subdued the rental market for houses.
“Rental markets have flattened in terms of growth, but that’s no surprise given that we have a lot of buying activity in the marketplace, which tends to take the pressure off demand in the rental market in terms of upward movement of rents," he said.
“We’re also getting a lot of investor activity, which is adding to the stock available for tenants.”
