Rents have not barely risen at all in the last 12 months, as first home owners launched into the market and left renting behind. While the median asking rental prices for houses and units in Sydney and Perth continued to decline, a small rise occurred in Brisbane, Hobart, Darwin and Canberra. 

“The overall rental growth of 1.3% in the 12 months to September 2009 is the lowest annual growth rate since 2005, significantly down on the two previous annual increases,” says Australian Property Monitors economist Matthew Bell, who compiled the report.“The declines have been helped along by low interest rates and the First Home Owners Boost giving tenants more accessibility to alternative options to renting.”

While rents were flat overall, the news isn’t all bad for landlords and investors with rental yields only slightly down in the September quarter but remaining generally strong over the last 12 months. Yields remain historically high due to the strong rental growth prior to 2009.

A strong rise in housing finance for investment properties in August shows that investors are returning to the market to capitalise on these strong yields. Bell is confident property landlords will regain the upper hand during the December quarter of this year, with interest rates starting their slow rise back from emergency levels, the employment outlook stronger and the halving of the First Home Owners Boost which will reduce the attractiveness of moving from renting to ownership.

On a city-by-city basis, the APM rental report found:

Adelaide:

•      Asking rents for both houses remain static for the September quarter
•      Remains by far the most affordable mainland capital to rent in for both houses and units
•      Gross rental yields show strong growth of +5.3% for the year

Brisbane:

•      Strongest rental growth for houses outside Darwin for the September quarter
•      Annual rental growth for units remains high at +7.9%
•      With Darwin, the only capital to show increasing gross rental yields for both houses and units
 

Canberra:

•      Strongest gross rental yields outside Darwin and Hobart for both houses and units
•      House and unit asking rents up over 5% for the year
 

Darwin:

•          Remains the most expensive city in the country to rent both houses and units
•          Strongest rental growth in the country for both houses and units
•          Highest gross rental yields for both houses and units of any capital city
 

Hobart:

•          Strongest annual growth in gross rental units for units in the country
•          Most affordable city to rent in Australia for both houses and units
 

Melbourne:

•          House rents remain flat for the 3rd consecutive quarter, and unit rents flat for the 2nd consecutive quarter
•          Unit rents still up nearly 5% in the 12 months to September 2009
•          Gross rental yields for both houses and units above where they were 12 months ago
 

Perth:

•          Houses and units produce the largest percentage fall in asking rents in the country
•          Gross rental yields for houses rise +3.9% for the year driven by house price weakness
 

Sydney:

•          House rents fell for the first time since early 2006 but remain slightly above where they were one year ago
•          Gross rental yields remain close to flat for both houses and units, and are just under the 5 year highs seen in March 2009

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