Rent.com.au rental market snapshot: March 2018

Property leasing data released by Rent.com.au for March illustrates the shift in Australian median rental property prices (both metro and regional) and rental affordability (the median room price metric).

Key Highlights:

• Signs of change in the Brisbane market, with median rents down for apartments and houses in March.
• Hobart’s apartment prices took a sharp turn upward in March, rising 9.4%, the highest of all capitals
• Perth remains the most affordable option for renters looking for shared accommodation – just $124/week.
• Properties in Hobart aren’t staying vacant long – dwellings shifted 5% faster month-on-month, while Melbourne also moved 2% faster.

Median rents

Hobart apartment rents rise highest of all cities

In Hobart, rental demand remained high and continued to grow; house prices were up 3.4% to $450/week against a 9.4% increase in apartment prices (now $350/week). Sydney rents are still high (to no one’s surprise), but cooling demand could be behind the stabling cost of both property types, apartment median rents were flat in March and dropped by 1.9%, but houses remained unchanged.

Melbourne apartment prices dropped 2.3% month-on-month to $420/week, marking the first drop-off since November 2017 when prices fell 2.4% to $400/week. Rent.com.au Chief Executive Officer, Greg Bader said the Melbourne rental market appears to be following Sydney down. “Melbourne remains a solid and competitive market, and stronger population growth is one factor that’s driving demand,” he said. “Melbourne’s advantage over Sydney is in its position as a population growth leader.”

Positive news for renters looking to lease properties in Brisbane, Queensland with both apartment and house median rents dropping off in March. Apartment prices fell 1.3% to $395/week while houses dropped 1.2% to $415/week.

Property Pursuit Director, Meighan Hetherington said the tenant demand cycle in Brisbane had followed the established five-year pattern again, with the peak in tenant demand being mid-January to late-February.

“Lease renewals for houses in this period achieved moderate increases of between 3-5%, and new leases were largely re-let with 12-month leases,” Ms Hetherington said. “Multiple applications on well-priced houses were received during this period.”

“Demand in March has also followed the five-year pattern by falling from the peak in February,” she said. “Vacancy without price adjustments has units continue to require aggressive price reductions to attract tenants.”

Ms Hetherington said in Brisbane, units continued to be challenged by the high levels of supply for tenants to choose from. “Asking rents had to be decreased by 2-8% to compete for tenant interest and secure long leases,” she said. “Tenant expectations have risen considerably in the past 12 months: air conditioning in all bedrooms and the living area is now high on the list of ‘needs’ for properties over $500/week, and a lack of a pool has become a challenge for properties over $850/week.”

Affordability

Perth still a shared accommodation bargain, but room costs falling in Brisbane

Renters looking to score a good deal on apartment prices would have found the best options in Adelaide (just $162/week for a room), against $116/week in Perth for a room in a house.

Nationally, Perth remained the most affordable capital at just $124/week for all property types, closely followed by Adelaide ($132/week) and then Brisbane ($159/week). Brisbane also saw the most significant change in price per room in March; down 3.64%.

The metric also showed that Sydney once again outranked all other state/territory capitals at $275/week for a single room (national price per room). By property type, both apartments and houses were least affordable of all capitals (apartments – $310/week, houses – $200/week).

Rent.com.au’s price per room metric was developed in a bid to improve the rental search process for the Australian market, Mr Bader said.

“RENT’s price per room metric helps both renters and property owners/investors look differently at the cost of renting,” he said. “The figure is more relevant to this audience, particularly renters seeking shared accommodation, and gives them a more accurate representation of how they will need to budget.”

Regional rents

Most regional areas stable, but small falls in QLD and SA

Median rents across the regions remained largely stable in March – consistent with data from February. Both Queensland and South Australia recorded a decrease in the median rent month-on-month, down 2.8% (QLD) and 1.9% (SA). Properties in the Northern Territory’s regions are still yielding high rental amounts with the weekly price unchanged at $450/week. For renters, this means still no relief in sight as the territory remains the most unaffordable of all capitals.

Time on market

Melbourne and Hobart properties move off market faster

Time on market in Darwin improved significantly in March, dropping 16% to take an average of 30.6 days to lease an apartment. Trends were much the same In Melbourne and Hobart, where both apartments and houses shifted quicker under a continued wave of rental demand, dropping time on market down.

In Melbourne, apartments moved 10% faster (24.8 days on average) and houses 2% faster (20.8 days). Hobart saw similar movement with a 7% improvement for apartments (13.1 days) and 5% for houses (now 15.2 days). Mr Bader said this movement across several capitals was indicative of healthy leasing activity prompting increased demand. “This is good news for property owners and investors who are seeing their vacancy time reduced,” he said.