Posted Date: 5/20/2011

Rental growth has overtaken house price growth. In the year to March, rents rose an average of 7.6 per cent in NSW and 6.5 per cent in Victoria, according to management firm Run Property, which looks after 18,000 properties on Australia’s east coast.

There was growth beyond 10 per cent in Sydney suburbs such as Kogarah, Glebe, Chippendale and Randwick, and Melbourne suburbs such as Armadale, Oakleigh and Brunswick. Rental growth in Queensland was much more modest, averaging 2.8 per cent.

Run chief executive Rob Farmer said: “Competition is over the top for rental properties, pushing the vacancy rate to less than 1 per cent in many areas.”

Cameron Kusher, a research analyst with RP Data, said rental growth had been negligible for two years but there were signs that was turning around. “As price growth comes out of the market, lending for housing slows and we’re seeing less and less new stock coming out of the ground, there is obviously more competition for available rental stock,” he said.

Chris Martin, from the NSW Tenants Union, said rents in NSW had been rising faster than incomes for the past five years. With high population growth and low supply, tenants had ways of moderating rental growth by methods such as share housing but now they were “packed to the rafters”. “Rents have been rising faster than the cost of living and wages, but they haven’t been rising like the selfinterested spruikers predict,” Mr Martin said. (AFR)

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Tim Murphy | Wednesday, June 15, 2011 | Comments (0) | Trackbacks (0) | Permalink

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