Not As Safe As Houses: Apartments Record Sharpest Falls

National asking rents for units dropped further over the September quarter, with asking prices down 4.2 per cent to March, while national house rents have regained last quarter’s falls.

Across most capital cities, weekly rents for houses were up over the September quarter, but sharp declines were recorded in inner-city areas across Sydney and Melbourne, with some regions dropping by up to $55 per week, the latest Domain Rental Report shows.

Domain senior research analyst, Dr Nicola Powell said that unit asking rents across the country saw the steepest annual fall since the start of Domain’s Rent Report in 2004.

Sydney and Melbourne unit rents recorded declines, but Perth and Adelaide saw increases of up to $20 per week.

Median House Rent Prices

^{^ Domain Rental report, September Quarter 2020}

Adelaide asking rents reached a new record over the September quarter, at $405 a week for houses and $340 for units, with unit rental prices having the strongest quarterly gain of all capital cities, along with Perth.

Perth recorded an increase in asking rents over the period, achieving the strongest gains out of all capitals.

And Canberra house and unit rents regained all of the fall from the previous quarter, with asking rents back at pre-pandemic record highs, Domain notes.

Canberra remains Australia’s most expensive city to rent a house, at $580 a week, and second most expensive to rent a unit, at $480, behind Sydney.

Powell said that regions in Sydney’s City and East, and Lower North Shore were the hardest hit for housing rental declines, with weekly asking rents falling by $55 and $30 respectively. Unit rents experienced similar falls, with Sydney’s City and East, Lower North Shore and Canterbury Bankstown hardest hit.

Across the capital cities, Melbourne suffered the largest falls with unit asking rents dropping another $15 a week over the September quarter and Melbourne’s inner-ring recording the greatest reduction in asking rents.

“In a matter of months Melbourne has become a tenants’ market, with the number of vacant rental properties more than doubling since March, though this is magnified in inner-city areas which are more susceptible to changes in overseas migration and international students, tourism and job losses associated with Covid-19,” Powell said.

While Melbourne’s inner, inner east, and inner south all recorded rent declines over the last quarter, asking prices for every other region either remained the same or increased slightly over the September quarter.

In outer areas of Melbourne, Powell notes that rents have remained stable or even grown, with house and unit rents growing over the quarter in the south-east and Mornington Peninsula.

Median Unit Rent Prices

^{^ Domain Rental report, September Quarter 2020}

The report notes that Brisbane unit rents could overtake Melbourne in the coming months, as Melbourne unit rents push the rent price gap to $5 between the two cities, a four year low.

“Brisbane is a two-speed rental market, with the inner-city more exposed to changes in supply and demand as a result of COVID-19 restrictions,” Powell said.

While inner-city dwellings may be in less demand in recent times, the growing allure of the regions continues, Domain notes that the outer regions performed better as more people look to regional locations to live.

Powell said that house rents for the Gold Coast remained stable since a record high achieved in mid-2019, with unit asking prices seeing an increase of $5 over the September quarter.

Sunshine Coast house and unit rents peaked over the September quarter at $510 and $420 a week respectively.