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Adelaide Rental Property Update
A CRITICAL shortage of vacant properties has led to sharply rising rents with no relief in sight this year.
Escalating median rents in the March quarter point to sustained hikes throughout the year, according to Australian Property Monitors' Rental Price Series Quarterly Report.
Housing affordability, and the shortage and spiralling costs of rental properties across the country will continue to put the squeeze on renters in 2011, the report says.
Nationally, unit rental prices rose sharply by 2.3 per cent, reflecting high demand in most capital cities, while national house rentals increased 0.1 per cent during the quarter.
In Sydney, median asking rents for houses rose 1.0 per cent to $485, while units jumped 2.3 per cent to $450 per week, ensuring the city remains the most expensive place to rent in the country.
Adelaide and Canberra topped house rental rises for the quarter with increases of 3 and 2.2 per cent respectively.Unit rents rose in all capital cities, except Brisbane and Hobart where rental markets remain flat. Demand for units in Darwin, Canberra and Melbourne pushed rents above the national average.
House and unit supply shortages in Brisbane caused by flooding are expected to be reflected in the June quarter.
"Renters should prepare for significant growth in rental prices throughout 2011, driven by accelerating economic activity, housing shortages and a depressed first homebuyer market," said Dr Andrew Wilson, Senior Economist, Australian Property Monitors.
"Units in particular have seen a major shift in demand, with chronically low vacancy rates for inner-city residences in most capitals intensifying competition amongst prospective tenants for available properties.
"However it is expected that rising rental yields will renew investor interest in the market and may provide some relief for renters in the longer-term."
Limited new development during 2011 is likely to add to the upwards pressure on capital city rental rates, RP Data report analyst Cameron Kusher said.
"With limited purchasing activity based on concerns about affordability, we are likely to see increasing demand for rental properties,'' Mr Kusher said.
"As a result, we expect capital city rental growth to revert to around five-year average levels, with inner city units and outer more affordable housing stock having the strongest prospects for rental growth."
Source: Adelaide Now 14/4/2011
