Sydney and Perth landlords benefit from increasing rents
Posted on Thursday, July 12 2012 at 12:48 PM
Investors in Sydney and Perth are experiencing rapidly rising rental yields, according to Australian Property Monitors.
Unit rental prices
in Sydney are now approaching those for houses, with the median weekly asking
rental for units increasing by 4.4 per cent to $470 per week in the past
quarter, compared with $500 per week for houses.
Sydney’s rental
market also remains highly competitive for prospective tenants, with low
vacancy rates being recorded in most areas.
Perth rental
prices have risen markedly over the past few months, up 7.5 per cent to $430
for houses and up 8.6 per cent to $380 for units.
“In the Sydney
market, the price increases in units over the quarter reflect growing demand
for this type of accommodation that typically is located closer to the CBD and
provides more established urban infrastructure,” senior economist Andrew Wilson
says.
“More widely,
particularly in Perth, Darwin and Canberra, ongoing shortages of accommodation
and low levels of new supply are placing upward pressure on rentals, which can
be expected to continue over the rest of 2012.”
Although Darwin
recorded significant rental growth for both units and houses over the June
quarter, much of this can be attributed to seasonal effects that are characterised
by extreme quarterly fluctuations typical of this market.
By contrast,
rental growth in Melbourne and Brisbane remained flat, with Brisbane unit rents
falling by 1.4 per cent. However, weekly median rents in Brisbane are actually
higher than Melbourne. The median rent for a house in Brisbane is $380 and for
a unit the median rent is $360, compared with $360 for a house or $350 for a
unit in Melbourne.
“The strong
capital growth prospects for Sydney, Perth and to a lesser degree Brisbane,
will act to dampen gross yield increases despite rent rises. They will
nonetheless prove increasingly attractive to investors seeking capital gains as
recoveries in the price cycles become increasingly evident,” Wilson says.
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