Economists predict house rents will moderate, but asking rents for units are experiencing record growth rates, and pressures from migration and limited housing supply remain.
could nevertheless put further upward pressure on unit rents, despite economic headwinds.
In North Sydney, house rents grew only 0.6 per cent in the 12 months to May, which equates to a $7 dollar increase, according to CoreLogic data. North Sydney vacancy rates also rose slightly from 2 per cent to 2.3 per cent in the year to May.Wrench North Sydney business development manager Yvette Cherry said house rents had stabilised in the area because house lease listings were staying on the market longer.
CoreLogic research director Tim Lawless said house rents in these suburbs signalled that Australia was approaching its rent ceiling. “In six months we probably will see rental growth be moderated from where it is at the moment,” Mr Lawless said.He said rent rises slowed in these suburbs because people could not afford to live in those areas, which had led to them either moving to a cheaper suburb, downsizing to units, or moving to their parents’ homes.
In the capitals, Perth recorded the strongest rise in unit rents, up 1.7 per cent in May, followed by Melbourne and Sydney . At the other end of the scale, a pick-up in supply in Canberra and Hobart resulted in unit rental values falling 0.4 per cent.Advocates for rent limits have pointed to the Australian Capital Territory, which caps annual rent rises for existing tenants at 10 per cent above the increase in rent for the consumer price index.
Federal Housing Minister Julie Collins on Sunday rejected a Greens call for a freeze or cap on rent increases as in the ACT.The federal government was instead trying to pass the housing future fund to build 30,000 more affordable homes over five years, increasing rent assistance and encouraging state and local governments to expand supply, she said.
“We’ve seen a bit of an increase in vacancy rates, which does suggest some pressure is coming out of the market. At the same time, obviously things are still very difficult for renters,” she said.
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