Strong Population Growth Keep Melbourne Rents ‘Close to Peak’

Property markets in Melbourne and Brisbane have remained steady with rents showing signs of improvement despite weak investor appetite.

Over the September quarter house rents in Melbourne remained flat at $430 with the market “close to a peak” according to property advertiser Domain’s rental report for September which saw rents rising across the country at a modest pace.

The market has not swung in favour of tenants to the same extent as Sydney due to Melbourne’s stronger population growth.

Unit rents across the city are just $10 a week higher than this time last year, at a median $420 a week, property advertiser Domain’s Rental Report for the September quarter shows.

The median asking rent for houses declined from a peak of $440 in the March quarter.

The rental vacancy rate is also rising in Melbourne, from 1.4 per cent to 1.8 per cent over the past 12 months due in part to rapid growth in residential construction in recent years.

Median weekly asking rent for houses ($)

The median weekly rent for a house in Sydney fell by 0.9 per cent to $525 during the September quarter, while median rent for a unit fell by 1.0 per cent to $520.

The vacancy rate also declined modestly, signalling that the rental market is again starting to tighten and rents could be close to bottoming out.

Though house rents in the city are currently 4.5 per cent below a peak of $550 sustained from March 2017 to September 2018, Sydney remains the second most expensive capital to rent a typical house and the most expensive capital to rent a unit.

Median weekly asking rent for units ($)

Brisbane affordability equals gains

Brisbane’s investment market seems to be enjoying a boost through a rental market resurgence as the oversupply continues to be absorbed.

Median asking rents rose over the year, as the rental vacancy rate fell, but Brisbane remains one of the most affordable capital city rental markets in the country.

Brisbane house rents rose 1.3 per cent in the September quarter to $405 per week.

Due to rents remaining unchanged from September last year to June this year, this also puts house rents 1.3 per cent higher over the year.

Brisbane unit rents were unchanged over the quarter, at $380, but are 1.3 per cent higher over the year.

The rental vacancy rate declined from 2.6 per cent to 2.2 per cent over the past 12 months.