Canberra house rents drop but still the most expensive capital city to rent

Canberra tenants have been delivered a slight respite with house rents dropping in the territory over the past three months, but unit rents have continued to climb.

Domain’s latest rental report showed median weekly asking rents for houses in the nation’s capital dropped $20 over the June quarter to $550 per week. This equates to $1040 back in renters’ pockets over a year.

Seasonality has played a factor in the drop, Domain economist Trent Wiltshire said.

“The seasonal factor is part of it … looking across the quarter, it’s going from a seasonally strong quarter in March into the June quarter which is not as strong,” he said.

“There are more rental properties sought in the new year than in the second quarter.”

But Mr Wiltshire said an overall softening in the market was also contributing to the quarterly decline.

Capital city median weekly rents for houses 

The quarterly drop takes house rents back to where they were at this time last year. Canberra remains the most expensive capital city to rent a house, with Sydney not far behind at $530 per week.

While house rents have dropped, unit rents have risen – up 4.4 per cent year-on-year to $470 per week. Canberra is the second most expensive capital city to rent an apartment, Sydney is higher at $525.

• Related: The Canberra suburbs where it’s cheaper to buy a property than rent 
• Related: Two new homelessness services for the ACT 
• Related: Units being discounted across Canberra, houses not so much 
• Related: What’s happened to house and unit rents in your capital city?
• Related: Sydney rents record biggest annual fall in 15 years in good news for tenants
• Related: Melbourne rent prices drop for the first time in seven years in June quarter

Mr Wiltshire said unit rents in the nation’s capital have surged 18 per cent over the past three years – an anomaly for capital cities where there has been an apartment construction boom. 

“Despite the huge building boom, unit rents have still increased quite a lot and that hasn’t been the case in other capitals,” he said.

Capital city median weekly rents for units 

Canberra’s tight rental market has also been alleviated in recent months. Since March, Canberra’s vacancy rate has gradually climbed and last month it was at 1.3 per cent, compared to 0.8 per cent in the same period last year. 

“Generally if you are seeing vacancy rates rise that suggests a weakening market and maybe slower rental growth or rent price falls,” Mr Wiltshire said.

“But the change there is important, so yes it has risen but it still remains very low – 0.8 per cent is incredibly low so a rise to 1.3 per cent is a bit of a relief but it’s still very low and lower than other capitals.”

While winter is normally the slowest period of the year for rentals in Canberra, Fox Property Management director Penny Hyde says this year has been slower than normal.

“I think there has been a bit of a perfect storm over recent months – political unrest, unrest in the financial sector and it’s not the right time for employment relocation,” she said. 

“I would say in terms when we are listing properties for rent the number of inquiry is slower and the number of people going through open homes is lower.”

Ms Hyde said in the first half of the year, people were opting for periodic leases over 12-month renewals.

The drop in the median asking rent is “a move in the right direction”, according to Joel Dignam director of advocacy group Better Renting, but he said it was not enough for those struggling to find an affordable and suitable rental.

“It’s a good development … but the problem is out there for people trying to find an affordable home, $550 is a huge amount for a house,” he said.

“One of the capital cities is going to be the most expensive, but this is a title Canberra should be ashamed of.”

YWCA Canberra chief executive Frances Crimmins said “the number and diversity of people in housing stress is growing and there is a shortage of affordable options in the social, community and private housing markets”.

“While YWCA Canberra welcomes the news that the median weekly asking rent in Canberra has dropped by $20, we still have a long way to go to ensure that all Canberrans have an affordable, appropriate and secure place to call home,” she said.

“To be able to afford the median rental price of $550 per week, you would need to be a high-income earner, or have a dual income to be able to maintain this.”

YWCA Canberra has recently launched Rentwell – a charitable property management service that leases privately owned investment properties in the ACT at a below-market rate.