Rental growth for most Australian capitals failed to improve in the December quarter, however all signs point to increases later this year, according to Australian Property Monitors (APM).
APM says national house rentals rose by just one per cent, with three per cent total growth recorded for 2010. National unit rentals fell marginally by 0.2 per cent in December.
"Affordability constraints generated by tight rental markets with supply shortages and chronically low vacancy rates, have placed a short-term floor under asking rentals," APM says.
“That seems to be the case for Liverpool also, says Craig Adams from Dunn & Horne, Liverpool. We have experienced very tight vacancy rates for the last two quarters of 2010 and we think this will continue for 2011.”
"Although strong demand and competition remains for rental properties in most markets, landlords have been unable to convert this into significant rental increases. Given the prospect of rising incomes generated by economic growth accelerating through 2011, combined with continuing strong population increases and declining dwelling construction levels, significant rental growth for both units and houses should resume in all markets by the middle of 2011."
The capital city markets of Sydney, Adelaide and Darwin recorded flat growth in house rentals in the December quarter, with Melbourne and Perth growing slightly by just over one per cent. Brisbane, Canberra and Hobart recorded stronger levels of quarterly house rental growth, with Hobart showing a strong rise of 6.7 per cent in house rentals.
APM says unit rental growth data revealed a similar mixed pattern of outcomes, although growth levels were mainly flat or subdued.
"The Canberra rental market in particular appears to be a standout, with nation-leading annual growth indicating significant underlying supply shortages, with solid income growth and economic performance putting upward pressure on prices.
" Sydney, Darwin and Canberra continue to be the most expensive capitals for renting in the nation, with Darwin median house rentals remaining 15 per cent higher than Sydney. APM says significant price growth by mid year in most capital city markets, combined with solid rental growth, should continue to produce stable yield outcomes for investors.
"However the prospect of continued subdued price growth in Melbourne and Brisbane may provide investors with opportunities for increased gross investment yields, particularly in the unit market.
“Craig Adams believes that we will see some positive results for both sales and rentals in 2011.” Feel free to give Dunn & Horne Real Estate a call for all of your property needs.