Canberra is now the most expensive city in Australia in which to rent a house or unit, with rental prices hitting record highs, new figures show.
While Canberra houses have remained the most expensive of all capital cities since December 2019, this is the first time in a decade that Canberra unit prices have surpassed those of Sydney, according to the Domain Rent Report, released on Thursday.
In the three months to December 2020, the median asking rent for Canberra houses was $600 per week, up 3.4 per cent over the quarter and year. Rent for units was $495 per week, up 3.1 per cent over the quarter and year.
|Median asking rent of all capital cities for houses|
|Median asking rent of all capital cities for units|
Domain senior research analyst Nicola Powell said several factors had contributed to the city’s high prices, including its high employment rates, low COVID-19 cases, and the “lifestyle on offer”.
“The territory [also] has fewer international arrivals relative to other cities impacting rental demand to a lesser extent,” she said.
“Having a strong public service employment base has meant minor job losses compared to those seen in the private sector. This has also meant the territory has been better placed economically, buoyed by the public sector and industries reliant on government spending.”
The city’s low rental vacancy rate at just 1.1 per cent in December is a testament to the capital’s tight rental market, which in turn has driven up rent prices, Dr Powell added.
Property manager Tim Westphal of Independent Property Management said the rental market had been really strong in the last quarter with high demand from tenants looking for properties all over Canberra and its surrounds.
- Related: Domain Rental Report
“Demand is strongest in the Inner North and Inner South regions, followed closely by the Belconnen and Gungahlin regions,” Mr Westphal said.
“The last quarter, we had 1200 [people] through open-home inspections per month – which is crazy. And in the first weekend of inspections this year, we had 1200 in one weekend, which is a strong indication of the competitiveness in the market.”
For Belconnen resident Eythan Hillier, finding a rental property in Canberra is proving to be harder than it was 12 months ago when he first entered the market.
“Myself and three other men were looking for a four-bedroom property at the start of 2020. It took us two months before we secured something in the Belconnen region,” Mr Hellier said.
“Now the landlord has informed us that they’ll be moving back in, so the hunting has begun once again but with the way the market is at the moment, I don’t hold much hope that we’ll find something soon.”
Mr Hillier and his housemates pay close to $600 per week for a four-bedroom house in the Belconnen region, and are now looking for a three-bedroom property for less than $600 per week. They intend to stay north of Lake Burley Griffin.
“I’ve attended dozens of open-home inspections, so far. On one day, I attended eight properties all with 40 to 50 people also waiting to inspect the home,” Mr Hillier said.
“I’m not fussed about whether it is a house or unit but I don’t want to be paying more money for a sub-par home and some of the asking prices for these properties are not worth it … but I need a home sooner rather than later.”
According to the latest figures, houses in the Inner North had the strongest quarterly growth of 8.3 per cent to $650 per week, up 4.8 per cent from the previous year.
|Median asking rent across Canberra regions for houses|
For units, Greater Queanbeyan had the strongest quarterly growth of 6.7 per cent to $320 per week, a figure that remained unchanged from the previous year.
|Median asking rent across Canberra regions for units|
With the lack of stock and the high demand, Mr Westphal said it is common for tenants to offer above the advertised asking price.
“That’s just how the market is right now and if there are 1200 walking through in one weekend, those advertised prices aren’t likely to remain,” he said.
Better Renting executive director Joel Dignam said there was not enough affordable housing in the capital to alleviate the price hikes and people searching for a rental were being locked out by unaffordable prices.
“One thing that has happened is people with higher incomes want to live in cheaper places, particularly last year because of the economic pressure brought on by COVID-19,” he said.
“But what that means is lower-income people are priced out of those affordable areas and we need ways for them to be able to find an affordable home.”