Thursday, 15 January 2015

Rents remain at or near record levels – Sydney surging

Increased dwelling construction and record investor activity have failed to provide relief for tenants, with rents in most capitals remaining at or near record levels. The national median weekly asking rent for houses increased by 0.6 percent over the December quarter with the unit rent increasing by 0.1 percent.

Sydney rents continue to rise despite record activity from investors over the past year and remain the highest of all the state capitals.

The investment market remains resilient, with gross yields consolidating or rising in most capitals for both houses and units over the quarter. Flattening price growth and rising rents are putting a floor under gross yields which had been declining due to recent strong prices growth.

Upward pressure on rents is set to continue through 2015, particularly in the robust Sydney market where underlying demand continues to outstrip supply.

Generally high and rising rents, tight vacancy rates and consolidated gross yields are offsetting recent concerns regarding possible over-investment in residential property – particularly in the Sydney market.