allhomes by JESSICA TAULAGA
Canberra tenants are now paying the highest median asking price for a house in the city’s history, while the unit market has stabilised over the quarter, new Domain data shows. It remains the most expensive city in which to rent a house or unit in the country.
The latest Domain Rent Report for the June quarter 2021, released on Thursday, showed the median asking price for a house in Canberra hit a record-high, eye-watering $630 per week.
This was up 5 per cent over the quarter and 10.5 per cent over the year, the strongest pace of annual growth since 2007.
When looking at Canberra’s unit market, its record-high median asking price of $500 per week remained unchanged from the previous quarter but increased by 6.4 per cent over the year.
“The fact that unit rents have held, while we’ve seen that sharp increase in house rents, shows that the price gap between renting a house and a unit is at an all-time high,” Domain chief of research and economics Nicola Powell said.
“Landlords are boosting yields by leveraging a tight rental market, the ending of the ACT rental moratorium, increased interstate demand and returning expats,” Dr Powell said. “These factors are what is driving an already tight rental market in Canberra. It’s one of the tightest in Australia.”
The latest figures come as no surprise for property manager Maria Edwards of HomeGround Real Estate Canberra, which offers affordable housing.
“I think it’s disheartening, of course, but it’s been a problem that’s been building up for many years. It didn’t just happen overnight,” she said.
The shortage of affordable properties was putting pressure on those on low incomes, Ms Edwards said.
“Because of the lack of supply, tenants are taking anything they can get, but with utility and energy bills increasing, they are having to make a choice between paying the rent or feeding their family,” she said.
“Previously, say two years ago, those looking for a rental property would only be looking for a few weeks. Now, they’re hunting for months. Everything is going for so much more than the advertised price and that’s not affordable for a lot of tenants.”
Blackshaw Manuka’s head of property management Courtney Baxter said the past three months had been “busier than usual” in the rental market, with demand felt across all regions in the capital.
“Usually, we’d see a lot of movement in the rental market at the start and end of the year but it’s been constantly busy, especially for rental houses [of] less than $600 per week,” she said, adding that the issue was there were very few properties available for tenants.
According to the report, the strongest yearly growth in median asking rents for a house was in Tuggeranong, up 11.5 per cent to $580 per week. This was an increase of 3.6 per cent over the quarter.
Woden Valley had the strongest yearly growth in median asking rents for units, up 9.5 per cent to $460 per week. This figure remained unchanged from the previous quarter.
“We’re finding that people aren’t worried about location anymore; it’s being able to find something,” Ms Edwards said.
“I’ve had tenants work in Tuggeranong but live in Gungahlin because there wasn’t anything available for them. Some people can’t be picky, especially when the most fundamental human thing you need – a roof over your head – is at stake.”
Ms Edwards also said a number of tenants were “on the verge of homelessness” because landlords had decided to sell their investment properties to take advantage of the booming property market.
She said that, with Canberra’s vacancy rate sitting at just 0.8 per cent in the three months to June, according to Domain data, tenants were renewing their leasing contracts.
“There’s very little movement from current tenants because they know how competitive it would be if they were to look for a new rental property. They want to stay put and avoid that,” she said.
Dr Powell said the steady vacancy rate was a signal that “rental conditions could be stabilising”.
“This sharp rise in house rents is unsustainable against a backdrop of weak wages growth that is unable to support ongoing increases in rent,” she said. “While Canberra firmly remains a landlords’ market, the pace of rent hikes might start to slow.”