Unprecedented rates of interstate and overseas migration have sparked one of Brisbane’s strongest rental markets in a decade with the city experiencing tightening vacancies and record-high median prices.

According to Domain, national house rents have hit record highs in June to be at highest levels since 2012.

Rental vacancies are now tightening in most capital cities except Melbourne and Sydney, which have been hit hardest by the loss of international students.

Brisbane house rents have now increased for four consecutive quarters to $450 a week after the strongest rate of annual rent growth in almost 14 years.

According to Australian Bureau of Statistics data, Queensland’s population grew by 1.9 per cent during 2019-20, the highest growth rate of the capital cities.

In the December quarter of 2020 Queensland experienced its biggest boom in new residents in almost two decades with a net gain of 30,000 people from interstate.

House weekly asking rent, June Quarter 2021

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Analysts expect Queensland’s population to now hit 5.44 million by mid-2025, up from 5.17 million in June 2020.

Domain senior research analyst Nicola Powell said Brisbane’s rising rents had started to improve gross rental yields, suggesting rents are rising faster than purchase prices.

“Investors have already started to look towards Queensland for better yields and growth prospects, as well as seeking lower entry-prices and holding costs,” Powell said.

“Increased interstate demand means the vacancy rate has dwindled to a multi-year low. More investment activity will help to ease rent hikes eventually.

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“However, Brisbane has become a growing destination of choice for those moving from interstate.”

Canberra remains Australia’s most expensive capital city to rent a house or a unit.

House rents surged by $30 during the June quarter, the strongest pace of annual growth since 2007, to be at a record high of $630 a week, $60 higher than the same time last year.

Darwin is the second most expensive city to rent a house after a 20.9 per cent annual leap in house rents, the steepest rise since 2013.

House rents reached the highest level since mid-2015 after surging $43 during the quarter to $593 a week.

Units weekly asking rent, June Quarter 2021

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“Working remotely has opened relocation opportunities, while changing border restrictions have also kept residents in Darwin longer than originally planned,” Powell said.

“As Australia contemplates its pandemic path to recovery, Darwin’s revived rental market hinges on economic and jobs growth.”

Perth house and unit rents have now hit a six-year high following four consecutive quarters of rising rents.

House rents jumped by $20 during the June quarter to $450 a week, surging by $80 over the past year, or 21.6 per cent—the fastest rate of rent growth in roughly 14 years.

For the first time in 13 years, Sydney is the third most expensive capital city in Australia to rent a house.

House rents remain at the record high of $550 per week, $10 above this time last year.

Meanwhile, for the first time on record, Melbourne is the most affordable of the capital cities to rent a house.

Despite this, Melbourne has been the main driver of the latest decline in the national vacancy rate, with the Victorian capital's vacancy rate falling to 3 per cent in June, from 3.8 per cent in May.

Adelaide has hit a six-year high after four consecutive quarters of rising rents resulting in house rents nudging $5 higher over the June quarter to a record of $430.