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COVID-19 has undeniably altered the property market in 2020, with a clear shift in tenant priorities affecting the price of unit rentals throughout the country.
Over the past 12 months, house rentals in most capitals have flourished, while unit rentals have suffered the steepest annual decline on record, stooping to the lowest asking price since early 2014, according to the Domain Rental Report for the December quarter.
“House rents are now at a record high following the steepest annual gain in just over a decade,” Domain’s senior research analyst, Dr Nicola Powell, said.
Moreover, as COVID becomes a catalyst for a sea or tree change, for the first time in five years it is now more expensive to rent a unit in Brisbane than Melbourne, with Aussies heading north.
Below we reveal how much it currently costs to rent in Australia’s capital cities:
The divergence in house and unit rents has resulted in the largest price gap in Sydney’s rental market on record, according to Dr Powell.
House rent growth is being supported by stronger conditions in Sydney’s outer areas such as the Blue Mountains and Central Coast, while Northern Beaches bucked the declining trend of unit rents with record high increases.
For the first time in five years, Melbourne is the third most affordable capital city to rent a unit, after Adelaide and .
Renters stand to save the most in inner Melbourne, particularly the inner east and inner south. Savings could go from $25 to $80 a week for units and $20 to $45 a week for houses, when compared with December 2019 rents.
It is now more expensive to rent a unit in Brisbane than Melbourne as house and unit rents reached record highs in the lifestyle locations of theCoast and Gold Coast with Aussies heading north.
Two consecutive quarterly gains have resulted in the steepest annual increase in seven years for houses, the report stated.
Despite rents reaching record highs, Adelaide is now the most affordable capital city to rent a house, a title it held more than three years ago. It also remains the cheapest city to rent a unit.
“If borders remain open, Adelaide will continue to benefit from a resurgence in domestic travel, which will drive demand for short-term leases, this could tighten the long-term rental market further,” Dr Powell said.
A testament to its continued recovery, Perth saw the highest asking rents it has seen in five years. Perth also posted the strongest annual growth of all the capitals as well as its steepest annual jump in rents since it hit a price peak mid-2013.
According to Dr Powell: “Tenants are now operating in a landlords’ market… With bullish capital growth slated for Perth in 2021 investors could be encouraged to make a purchase, helping to boost rental supply.”
Hobart’s rental market remains the tightest of all the capital cities. It is also the only capital city to record lower house rents compared with pre-pandemic March, thus standing as the third hardest-hit unit rental market, behind Sydney and Melbourne.
Still, it remains competitive for tenants, with house rents having risen 35 per cent over the past five years and unit rents having surged 43 per cent, the steepest rent growth across the cities during this period.
Canberra remains the most expensive capital to rent a house, and is now also the most expensive city to rent a unit.
This is the first time in a decade that Canberra has the highest unit rents of all the capitals.
Darwin house and unit asking rents have reached their highest point since 2017.
Annual gains in rents are also the highest since the lead up to the 2013 peak, with house rents seeing double-digit gains.