Renters abandoned Australian capital cities in favour of regional locations last year, according to Corelogic’s quarterly rental report.
Despite the December quarter marking a small improvement in the rental market, annual figures show Australians opted for space and lifestyle outside of city centres with regional areas outperforming the major cities.
Corelogic research director Tim Lawless said Covid-19 not only disrupted our lifestyles, but it also reshaped housing demand with a trend towards lower density options.
“Higher density housing markets have seen less demand during the pandemic, a trend that has been amplified by stalled overseas migration and remote working opportunities luring residents further afield,” he said.
The Sydney and Melbourne unit rental markets suffered the greatest hit, down 5.7 per cent and 7.6 per cent over the 12 months to December, respectively.
Nationally, house rental prices in capital cities enjoyed an upwards tick of 3.3 per cent annually, in contrast to a 4.6 per cent decline in unit prices over the year.
Despite the divergence in rental price performance in 2020, rents rose nationally by 1.9 per cent annually last year, which is the largest annual increase since mid-2018.
Regional rental markets were up 2.9 per cent over the last quarter of 2020 and 5.3 per cent higher over the year.
Change in Rents (all dwellings)
| Region | Median Rent | Month | Quarter | 12 Months |
|---|---|---|---|---|
| Sydney | $556 | 0.0% | -0.1% | -1.4% |
| Melbourne | $438 | -0.1% | -1.0% | -2.9% |
| Brisbane | $448 | 0.7% | 1.4% | 1.8% |
| Adelaide | $410 | 0.7% | 1.2% | 3.2% |
| Perth | $428 | 1.5% | 4.6% | 9.7% |
| Hobart | $460 | 1.6% | 2.1% | -1.2% |
| Darwin | $491 | 2.3% | 5.6% | 8.8% |
| CanberraCapitals | $586 | 1.0% | 3.7% | 3.9% |
| Combined capitals | $468 | 0.4% | 0.8% | 0.7% |
| Combined regionals | $412 | 1.1% | 2.9% | 5.3% |
| National | $451 | 0.6% | 1.4% | 1.9% |
^Source: Corelogic
Tight rental markets in Canberra, thanks in part to a less transient workforce, has led Australia’s capital to strip Sydney of its long-held title of most expensive city to rent a house.
Canberra, where the median house now costs $624 per week to rent, has been somewhat insulated from the effects of stalled immigration that has plagued other states’ rental markets.
Perth and Darwin were the best performing capital city rental markets in 2020, with dwelling rents increasing 9.7 per cent and 8.8 per cent respectively.
Working remotely has allowed Australian renters to re-evaluate their location, with many opting for lifestyle destinations, more space and less Covid-19 restrictions.
Regionally house and unit prices were boosted significantly, ending the year 5.5 per cent and 4.5 per cent higher.
“Whether this trend has some longevity is yet to be seen, but international borders are likely to remain closed for some time yet, and for many, remote working conditions have proved to be productive,” Lawless said.
