Sydney leads capital city house price growth
After a tumultuous year, most capital cities are now rebounding as vendor confidence continues to improve. ...
While most capital cities saw house rents soar to new record highs over the first quarter of 2021, Melbourne continued to lag behind – becoming the second most affordable capital city to rent in Australia, a new report has revealed.
Building on the post-pandemic recovery trend, national house rents have increased by 0.6 per cent over the March 2021 quarter, bringing the median weekly asking rent to $471, according to the recent Domain Rental Report.
Hobart recorded the highest quarterly rise in weekly house rents at 4.3 per cent, followed by Adelaide at 3.7 per cent, at 3.6 per cent and Brisbane at 3.5 per cent. Meanwhile, Sydney, Canberra and Darwin remained stable.
Of all the capital cities, only Melbourne saw house rents decline by 2.3 per cent – making it the second most affordable capital city to rent a house for the first time on record, alongside Perth and behind Adelaide.
Similarly, only the Victorian capital experienced a fall in unit rents over the quarter by 2.6 per cent, returning rents to 2015 levels. Melbourne’s annual unit rent drop of 12.8 per cent is also the steepest annual fall since Domain records began in 2004.
Hobart, on the other hand, led the quarterly unit rent hike with with a 5.0 per cent increase in weekly rents, followed by Perth with 4.3 per cent, Adelaide with 2.9 per cent, Darwin with 2.4 per cent and Canberra with 1 per cent. Sydney and Brisbane unit rents remained stable.
“For the first time on record, Melbourne is the second most affordable capital city to rent a house, joint with Perth and behind Adelaide,” Domain’s senior research analyst, Dr Nicola Powell, said.
“It was only mid-2020 Melbourne was the third most expensive city to rent a unit, behind Sydney and Canberra. It is now the third most affordable capital city to rent a unit, after Adelaide and Perth.”
But while Melbourne’s vacancies have declined in recent months, they remain 182 per cent higher than last year, according to Dr Powell. This was directly influenced by the reduction of demand as a result of international border closures, more tenants becoming home owners and city residents moving to lifestyle locations.
“Inner Melbourne units have felt the brunt, with rents now at 2010 levels after tumbling by $110 a week annually,” Dr Powell noted.
Looking ahead, as Adelaide and Perth’s rental markets continue to tighten over the coming months, the research analyst believes that Melbourne could easily become the most affordable capital city to rent in Australia.
How much do you need to rent?
Year-on-year, Perth emerged as the winner with a 14.7 per cent annual rise in house rents and a 14.1 per cent increase in unit rents, resulting in “the highest asking rents in almost six years”, according to Domain.
However, Canberra still holds the record for the most expensive median house and unit rent at $600 and $500, respectively.
Meanwhile, Adelaide was the most affordable with a $425 median house rent and $350 median unit rents.
Based on the latest figures, the report highlighted that house rents in all capital cities except Melbourne, Perth and Darwin hit record highs in the March quarter.
Here’s how much you will need to rent in each capital city: