A host of capital city suburbs have seen their median house and unit rents increase more than 20% over the past year, according to CoreLogic RP Data.
Although capital city rents overall are currently increasing at their slowest rate on record, certain suburbs in all capital cities have performed well above average, with double-digit rental median increases for either houses, units or both in the 12 months to September.
Cameron Kusher, CoreLogic RP Data’s senior research analyst, notes that “although there is some variation across cities, it is generally the areas of the city with higher-priced housing stock that have seen the greatest rental rises over the past year”.
Nationally, the top-performing suburbs for median house rent increases were all in Sydney.
The beachside suburb of Collaroy was by far the strongest performer, with an annual median increase of 31.6%. The weekly rental median for this suburb is now $1,250.
The harbourside suburb of Rose Bay and north shore suburb of Northbridge were the next best performers, both up 25% for the year to hit weekly medians of $1,750 and $1,500 respectively.
Cremorne and Waverley were each up by more than 20% over the year, as were the Adelaide dress circle suburb of Hyde Park and the Melbourne bayside suburb of Black Rock.
Suburbs outside of Sydney that increased by 10% or more over the year include:
- Melbourne – Sorrento, McCrae, West Melbourne and Brighton
- Brisbane – Chelmer, Doolandella and Norman Park
- Adelaide – Adelaide, Semaphore and Hillbank.
None of the top 5 suburbs in Perth, Hobart or Canberra grew by more than 10% over the 12 months, while all of Darwin’s top 5 performers saw negative median house rental growth.
The Melbourne suburb of Cremorne saw the biggest increase in weekly unit median prices, up 21.5% for the year to $523.
Clontarf in Brisbane’s north was the second-best performer, up 20.6% to $410/week, while North Hobart came third, up 18.3% to $355/week.
Other suburbs that were up 10% or more for the year include:
- Sydney – Greystanes, Arncliffe, Enmore and St Peters
- Melbourne – Oakleigh East, Kew East, Burwood and Caulfield East
- Brisbane – Salisbury and Thorneside
- Adelaide – Mile End, Mitchell Park and Findon
- Perth – Spearwood
- Canberra – Yarralumla and Forrest
- Hobart – Hobart.
Coconut Grove was the only Darwin suburb to see any positive growth over the year for median unit rents, up 1.6% to $480/week.
The yield factor
Despite big rent increases in several Sydney and Melbourne suburbs, both cities showed the lowest gross rental yields for houses and units in September, according to CoreLogic RP Data, suggesting median rents overall are still not keeping up with skyrocketing property values.
By contrast, Adelaide and Brisbane are showing both healthy median house rental price increases in several suburbs while also enjoying comparatively high rental yields.
And for units, the Brisbane and Hobart markets are both showing good figures for both median rent increases and yields.
“With new dwelling construction booming we anticipate that rental growth will continue to slow and may start to fall at a macro level, however there will always be a great deal of variation below the capital city level and from region to region,” said Kusher.
“Landlords that own properties in desirable locations with fewer competing properties for rent stand the best chance of avoiding rental falls.”
Where to next?