Australian property investors should be pleased to read the latest data, with Australian property rents up 8.9% in the 12 months to October 2021. This marks the largest increase in rental prices in Australia since July 2008, when Australia was experiencing the peak of the mining boom.

At the same time as rents have been increasing, we’ve also seen national vacancy rates fall to a multi-year low of just 1.5%. To put this in perspective, a vacancy rate of below 3% is considered a ‘tight’ market and a good sign for property investors.

This week we take a look at the data from across the nation to explore what has happened to rental prices across the capital cities over the last 12 months.

Sydney

Sydney saw an increase of 7.2% in annual rental prices over the last 12 months with the median rent now sitting at $595. The gross yields declined given the rise in property prices from 2.94% twelve months ago to 2.45% today.

Melbourne

Melbourne saw one of the lowest increases in rental prices over the past 12 months at just 1.8%. Given the decline in international students and immigration, this was to be expected. The median rental price in Melbourne is now $450, and the yield has declined from 3.25% twelve months ago to 2.76% today, slightly above that of Sydney.

Brisbane

Brisbane saw relatively strong growth in rental prices with an increase of 9.7% of the past 12 months. The median rental price is now $491, above that of Melbourne, and the property yield declined from 4.4% to 3.93%, given the strong increase in the property prices themselves in the sunshine state.

Perth

Coming in at second place, Perth saw an increase in the rental price of 14.5%, off a relatively low base. The median rental price in Perth is now $478, and the gross rental yield saw a decline from 4.48% to 4.33% over the past twelve months.

Darwin

Darwin came in first place with the highest increase in the national rental price of 20.9%. The median rent in the city now sits at $561, and the gross rental yield actually increased over the past 12 months from 5.88% to 6.17%.

Hobart

Hobart came in at third place, with a twelve-month increase in the rental price of 12.8%, which saw the median rental price increase to $507. The gross yield saw a decline from 4.67% to 3.89%, which was partly driven by the increase in property prices in the area.

Canberra

Canberra saw reasonably strong growth in the average rental price at 9.6%, with the median rental price coming in at $633. The gross yield for Canberra saw a decline from 4.48% to 3.92% over the past twelve months.

Overall

In looking at the data across the country, the population growth in the regional areas of Australia was to be expected as more people are working from home and commuting to the office less than previously. While we don’t expect that we’ll be working from home forever, we do expect to see a more flexible workplace over the coming years, hence the demand in these areas.

The data also suggests that more and more renters will be looking at higher-density housing options, where rental prices could be more affordable. Given the increase over the past 12 months in rental prices across the major cities, the country is certainly facing an increasing challenge of rental affordability.

If you have any questions about buying your first investment property, or expanding your portfolio, reach out to our team today for an obligation-free discussion about how you can achieve this.

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