01.Rental surplus doesnt come to pass as more are forced to rent
Renters in Sydney are paying more than ever, despite earlier predictions that an extended period of flat growth would continue.
According to the Domain Group’s APM Rental Report for the final quarter of 2013-14, the median asking price for a Sydney apartment has jumped two per cent to $500 a week, while house rentals have increased by the same margin to $510.
However, Sydney renters can pay between $550 and $700 a week, depending on the neighbourhood.
More than half of home loans in Australia are for investment properties, according to the Domain Group, and investor activity in Sydney was expected to lead to an oversupply of rentals and a continued levelling off of prices.
But a senior economist for the Domain Group, Dr Andrew Wilson, told Fairfax (which owns Domain) that the demand for rentals was pushed higher by an increase in would-be first-home buyers who can’t afford to buy.
To compound this, investors have increasingly sold their rental properties to take advantage of the recent surge in selling prices, Dr Wilson said.
Population growth in Sydney has also spurred demand.
Asking prices also went up in Melbourne, while rents continue to drop in Perth and Canberra.
Nationally, the median asking prices for rentals for units rose by 1.1% over the June quarter and three per cent over the last 12 months. At the same time, the median asking rent for houses
decreased by 0.3% during the June quarter but grew 1.5% in 2013-14 according to the report.