Report Shows Strengths of National Rental Market

Rental property markets throughout the country have shown their strengths in a recent report from Australian Property Monitors (APM).

The 'Rental Report' for the December 2013 quarter found "mixed results" over the period across the country's eight capital cities. Overall, weekly median rents for houses saw the largest increase during the quarter after rising by 0.9 per cent. This activity occurred while rents for units experienced a small decline by -0.4 per cent.

Sydney rental market strong

Results from the report pinpointed Sydney as the most expensive major capital market for renters. This was after APM recorded a significant rise in weekly median rental prices for units, which came to to 5.4 per cent year-on-year and 1 per cent over the quarter. On the other hand, weekly median rents for houses in Sydney remained flat and unchanged at $500. With unit rents now at $485, it seems they will soon be catching up to houses.

Commenting on the Sydney market, APM Senior Economist Dr Andrew Wilson noted the rises in unit rents over houses "reflects the affordability advantage of units and the preference for inner city and apartment living".

While rents have been increasing for real estate in Sydney, the report found that rental yields are slowly dipping due to rising house prices in the city. Dr Wilson explained the weakening gross rental yields are also due to an "unprecedented surge in investor activity", which has been evident in the Sydney property market for quite some time.

"This trend can be expected to continue in 2014 with rising supply and moderating demand putting downward pressure on house rental growth," noted Dr Wilson in the report.

Darwin house rents rise

Over the December quarter, it was houses in Darwin that recorded the highest growth in weekly median rents, tied with Adelaide. After a 7.7 per cent climb in prices year-on-year, the weekly median rent for houses has now hit $700, making it the highest in the country. Units also experienced a rise in rents over the quarter and the year at 3.6 per cent.

Rises in weekly rents for real estate in Darwin have also helped to provide property investors in the city with some positive gross rental yields. In fact, Darwin now boasts the highest rental yields in the country for units at 5.82 per cent and the second highest for houses at 5.12 per cent. These figures could provide investors with a guide of where to invest for their next property venture, whether it's a house or a unit.