While Canberra has traditionally been the most expensive city in Australia to rent, Darwin now leaders the field for houses where the rent for a 3 bedroom house rose 34% to $440 per week. Rents for 2 bedroom units in Darwin rose even more (by 51.1%.)
With the low vacancy rates in all our capital cities, we are in for more significant rental increases for the next few years. The rental market is considered to be in equilibrium when the vacancy rate is around 3%. The low vacancy rates we are experiencing means that whenever a property becomes vacant there is strong competition for it by a large number of tenants.
But this doesn’t mean property investors can ask any rent they like. At Metropole Property Management we are seeing well priced rental properties leasing quickly and the landlord has a choice of quality tenants. On the other hand, if rentals are set at unrealistically high levels, properties remain vacant longer, costing their owners precious lost rental. It’s not usually worth chasing that extra $10 or $15 per week when you take into account the cost of a week or two’s vacancy.
Increasing rentals and decreased affordability also means that tenants are not moving as often – they just can’t afford to. This security of long term tenants, minimal vacancies and rising rentals is bringing smart investors back into the property markets. With this group of investors chasing the same type of properties, often inner suburban apartments, the supply and demand imbalance is causing property prices to spiral upwards.
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source: realestate.com
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