Brisbane tenants, already benefiting from stagnant rents, can expect more of the same for the forseeable future, experts predict.
House rental prices have not budged in two years, the median continuing at $400 per week over the December quarter, according to the Domain Group’s quarterly rental report. The median unit rent rose $5 to $375 per week. It is the first rise in the median rent for units since June 2014.
But investors could be deterred by vacancy rates that were still climbing, said Domain Group chief economist Andrew Wilson.
“[Brisbane] is certainly one of the best cities for tenants in Australia at the moment,” he said.
Dr Wilson said that with supply pushing ahead of demand, the Brisbane market was likely to remain positive for tenants.
“With no real driver to push Brisbane’s flat market, I’d think it will be much of the same in the foreseeable future,” he said.
Vacancy rates have risen to 3.6 per cent over the December quarter and that, coupled with apartment oversupply, would make the likelihood of rent increasing unlikely in the short term.
But, Dr Wilson said, one positive for investors was an increase in capital growth.
Inner brisbane continued as the most expensive place to rent a house at $450 per week, but Redland had the most expensive rents for unit, at $400 per week.
The cheapest rent was found in Ipswich, with house rents at $340 per week and units $275 per week; making a unit in Ipswich the cheapest form of rental in the Brisbane region.
There has been a slight decrease in rental yields for investors with a drop 0.7 per cent for units and 0.5 for houses from December 2014 to December 2015.
3/114 Thorn Street, Ipswich is up for rent for $200pw. Photo: supplied
Brisbane-based Calibre real estate director Justin Hagan said that despite a possible oversupply of apartments in the city, investors should keep their heads up.
“New developments mean growth and a healthy property market, particularly with the increase in foreign investment over the last couple of years,” she said.
“As the number of cranes on the Brisbane skyline increases, so too does the Brisbane property market and this shouldn’t be seen as a negative for investors.”
The relatively sluggish Brisbane market makes it a better choice for tenants over other major capital cities with record high house rental surges in Melbourne, Adelaide, Hobart and Canberra and Sydney continues to experience record high house rent.
However, there is some good news for Sydney tenants with unit rents falling for the first time since June quarter 2012.
Perth and Darwin rents have continued their spiral downwards, but signs of recovery in the Perth market could offer some hope for investors in the future.
Tenants who are concerned about rental rises can check and compare the price of other rental properties around them (including those not currently vacant) on Domain’s Home Price Guide.
Originally Published On: http://www.domain.com.au/