Rents Rise Across The Country - The Effect Of Population Growth

CHRIS ZAPPONE
November 18, 2009 – 10:36AM

Rents on houses and apartments climbed nationwide throughout the year, even as low interest rates and the Federal First Home Buyers Grant boost lured more people into home ownership, a report shows.

Nationally, rents on houses increased 3.4 per cent in the 12 months to October, while they rose 4.1 per cent on apartments, rpdata.com said today. Rose Bay in Sydney’s east posted the biggest rises for houses, with rents jumping nearly 60 per cent.

Rpdata.com research analyst Cameron Kusher said that compared with previous years, the increases had slowed partially because the first-home buyer activity has eased some of the pressure on the rental market.

”With the First Home Buyers Grant Boost being wound back and mortgage rates rising, we anticipate that more people will be forced to remain in the rental market,” Mr Kusher said.

Rents on houses in Rose Bay jumped 58.3 per cent with the median weekly advertised rents rising to $950 from $600 a year ago. For units, Brisbane’s West End saw the biggest jump in the country over the year, rising 39.4 per cent to $460 a week from $330 a week.

NSW’s biggest rise in apartment rents occurred in Kingswood where they rose 30 per cent, with the median weekly rent increasing to $260 from $200 over the year.

In a separate release, the Housing Industry Association said Australia is likely to be 50,000 homes short of demand this year despite a 9 per cent increase in housing starts forecast for 2009-10. That shortage is likely last until at least 2012, the HIA said.

Toorak, Ballarat

In Victoria, the most expensive house rental neighbourhood was the Melbourne suburb of Toorak, where average median rent rose 43.8 per cent to $1280, from $890.

For units, the biggest jump in weekly rentals for the state came in regional Victoria, with Wendouree in Ballarat posting a 38.5 per cent surge to $180 from $130.

The rent increases came even with the number of home loans rising – jumping 5.1 per cent in September alone – helped by first-home buyers who made up more than one-quarter of borrowers, the Australian Bureau of Statistics said this month. The grant was halved at the end of September, days before the Reserve Bank began raising interest rates.

WA, Queensland, ACT

Rents on houses in the Perth suburb of Trigg rose the most in Western Australia, 26.3 per cent in the year to October to $505 from $400, while units in beachside Cottesloe rose the fastest, or 21.9 per cent to $488 from $400.

In Queensland, the suburb of Bulimba experienced the fastest rising house rents, 44.4 per cent to $650 from $450.

In the Australian Capital Territory the median house rent rose 41 per cent, to $1,100 from $780, while units in Braddon increased the quickest for the region, gaining 9.8 per cent to $450 from $410.