November 30, 2009
AFTER six months of relatively flat rental growth throughout the country, rents are expected to start rising again. Mortgage costs for landlords are already rising, courtesy of interest rate increases, and tenants will become more willing to agree to rental increases with unemployment expected to peak well below 7 per cent and jobs becoming more secure.
Across Melbourne, annual rental growth slowed between 2008 and 2009. Rental vacancy rates for outer Melbourne have recently been reported as falling from 1.2 per cent in September to 0.6 per cent in November, indicating very high demand for rental properties in suburbs more than 20 kilometres from the central business district.
The median weekly rent for houses in inner Melbourne (within 10 kilometres of the CBD) grew by 6.2 per cent to $470 between September 2008 and 2009. Middle (10-20 kilometres) and outer ring (20 kilometres-plus) suburbs have lower median house rents of $350 and $320 respectively, with annual growth rates outstripping inner Melbourne.
Median house rents in the outer ring in the 12 months to September 2009 were 8.5 per cent higher than in the 12 months to September 2008. The performance of the outer ring is even more eye-catching when looking at unit weekly rents, with those suburbs showing 10.4 per cent growth compared with 6 to 7 per cent for suburbs within 20 kilometres of the CBD.
AUSTRALIAN PROPERTY MONITORS
