The median rental price for units in Brisbane have surpassed Melbourne for the first time in five years, according to the Domain Rental Report for the December quarter.
House and unit rents have continued to reach record highs in Brisbane, with asking rents of $425 and $400 per week, respectively.
This follows two consecutive quarterly gains, which have resulted in the steepest annual increase in seven years for Brisbane houses.
With Australians having flocked to the sunny states during the COVID-19 pandemic, house and unit rental prices have reached record highs in the Sunshine Coast and Gold Coast.
“The increased rental demand is largely driven by a relocation to Brisbane amid COVID-19 and the resumption of local and interstate short-term travel,” according to Domain senior research analyst Dr Nicola Powell.
“Tenants are seeking liveability, affordability and are no longer tied to a specific location in the work-remote era,” she continued.
Despite Brisbane’s rental prices having surged, demand has remained high. However, Dr Powell has predicted that Brisbane’s vacancy rate will likely tighten in the coming months due to the rising interest from those in the southern states and the flow of regional residents.
Since December 2019, Brisbane residents reportedly pay an extra $15 per week in weekly asking rents for both houses and units.
Yet the “demand for inner-city apartments [has] remained weakened due to the absence of overseas migrants and tourists”, according to Dr Powell.
“It is clear lifestyle locations are experiencing an increase in demand from local travellers and those working from home opt to relocate,” Dr Powell concluded.
Indeed, house rental prices have increased in most capital cities while units recorded the steepest annual fall on record, reaching the lowest asking rent since early 2014.
Of all the capital cities, Melbourne units recorded the largest fall in asking rent since before the pandemic began (March 2020), down 9.8 per cent.
Although the rate of decline eased over the December quarter, three consecutive quarterly falls have resulted in the steepest annual fall on record.
Unit rents are now at 2016 levels, at a median rate of $420 per week.
“For the first time in five years, Melbourne is the third most affordable capital city to rent a unit, after Adelaide and Perth,” Dr Powell noted.
“[This is] a marked change considering Melbourne was the third most expensive city to rent a unit back in March.”
According to the Domain stats, inner-city apartments have been hardest hit with rents at a seven-year low in Melbourne, followed by the inner east and inner south hitting a four-year low.
However, house rents held steady over the quarter at a record high of $440 a week.
“Stability in house rents is being supported by stronger conditions across Melbourne’s middle and outer areas with rents either holding steady or growing over the December quarter,” Dr Powell said.
“House rents are at a record high in Melbourne’s north east, outer east, south east, west and Mornington Peninsula.
[Related: Housing policy must be ‘measured’, says REIA]
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