People moving to Australia to live and work face higher prices to rent houses and apartments in most cities, the latest real estate figures show.
Nationally asking rents for houses increased by 0.7% in the three months to the end of June and the rents for apartments went up by 2.5%.
But those moving to cities like Sydney and Perth face much steeper rent rises. The latest market report from Australian Property Monitors shows that the median weekly asking rental price in Sydney increased by 4.4% to $470.
In Sydney apartments are more in demand than houses and rents for flats are now close to the average weekly house rent of $500.
In Perth, median weekly asking rentals have risen markedly over the June quarter with house rents up by 7.5% to $430 and unit rents up by 8.6% to $380.'Increasing demand by tenants for Sydney apartments reflects growing interest for this type of accommodation that typically is located closer to the CBD and provides more established urban infrastructure. Sydney's rental market remains highly competitive for prospective tenants,' explained Andrew Wilson, APM senior economist.
These rises will likely continue, APM says, with Western Australia's population set to grow by over 3% in 2012 placing upward price pressure on a Perth rental market already characterised by a shortage of accommodation.
By contrast rental growth in Melbourne and Brisbane has remained flat over the June quarter, with Brisbane unit rents falling by 1.4%. Brisbane's current median weekly asking rents at $380 for houses and $360 for units are higher than those in Melbourne at $360 for houses and $350 for units.
Melbourne remains the most tenant friendly market of all the mainland capitals with rental growth for both houses and units having been subdued for some time. With comparatively high vacancy rates in most areas and a raft of new apartments in the pipeline this is expected to continue.
Other capital city markets have largely recorded benign results over the June quarter although Adelaide house rents rose by 1.2% over the quarter to $340, while Canberra unit rents rose by 2.3% to $440. Canberra continues to track Sydney's rental growth indicating a tight rental market with similar high rents.
Similar to the varied movements in capital city rentals over the quarter, investment yield outcomes have been mixed. Melbourne continues to produce the lowest yields for both houses and units of all the capitals at 4.2% for houses and 4.6% for units.'Although Darwin recorded significant rental growth for both apartments and houses over the June quarter, much of this can be attributed to seasonal effects that are characterised by extreme quarterly fluctuations typical of this market,' Wilson said.
'The strong capital growth prospects for Sydney, Perth and to a lesser degree Brisbane will act to dampen gross yield increases despite rent rises. This will nonetheless prove increasingly attractive to investors seeking capital gains as recoveries in the price cycles become increasingly evident,' Wilson added.