The Canberra rental market generally remains a tenant’s nightmare with skyrocketing rents reflecting a chronic shortage of accommodation.
Latest Domain data reports that over the three months ending May, the median weekly asking rent for houses in Canberra increased sharply by 6.4 per cent to $500 a week compared with the same period last year.
The annual increase in Canberra house rents was the highest recorded by any of the capital cities, with the next highest Melbourne and Sydney, with yearly growth of 5.0 per cent and 4.8 per cent, respectively.
Canberra unit rents have also surged over the past year despite significant recent increases in new apartment development.
The May quarter median weekly asking unit rent at $420 was 5.0 per cent higher than that recorded over autumn last year. Canberra unit rents are now the second highest of all the capitals and exceeded only by Sydney at $540.
Sharp increases in Canberra rents reflect a shortage of homes for lease as indicated by the latest monthly rental vacancy rates.
Although vacancy rates eased slightly over May, this reflected the seasonal impact on listings of the lengthy holiday distractions of the previous month.
Canberra vacancy rates, however, remain among the lowest of all the capitals at 0.9 per cent for houses, 1.7 per cent for units for a total homes vacancy rate of 1.2 per cent. Although vacancy remains tight in Canberra, the unit rate has eased over the past year – up from 1.4 per cent.
Related: Rents rise fastest in Canberra
Rents can be expected to continue to increase in Canberra driven by increased migration, a strong local economy, relatively low numbers of first home buyers and an underlying shortage of rental accommodation.
Actions by policymakers and banks to restrict activity by residential investors will only add to the current imbalances between rental supply and demand with even higher rents the logical outcome.
Dr Andrew Wilson is Domain Group chief economist. Twitter: @DocAndrewWilson Join on LinkedIn and Facebook at MyHousingMarket.