Rental returns have increased by more than 10% in Australian capital cities over the past 12 months, a new Real Estate Institute of Australia report shows.
Returns on three bedroom houses in the biggest rental markets of Sydney and Melbourne have gone up 9.3% and 10.6% respectively over the last year.
But that barely compares with the booming rental markets of Darwin – up by an astonishing 34.4% – and Perth, up by 15.4%.
At 5.3%, Brisbane was the lowest growth city, followed by Hobart on 8% and Adelaide on 8.5%.
The yearly result comes after strong figures for the September quarter, with rents in Sydney up by 5.4%, Melbourne by 4% and Brisbane by 3.4%. Rents stayed put in Perth, Canberra and Hobart.
The high prices are largely a result of record low vacancy levels of 1.9% for the past two and a half years, the report says.
Worryingly, the natural response to high rents – more people buying their own homes – does not appear to be eventuating, according to Australian Bureau of Statistics figures released today.
While the value of new owner-occupier mortgages increased by 1.7% in October 2007, the number of new loans decreased by 0.7%. This suggests that house prices are going up, but more people are not entering the market.
Fortunately for renters – unless they are also a business owner – the jobs outlook remains strong. ANZ jobs data released today shows the number of jobs ads in papers and online increased 0.7% in November, taking the total number of job ads to 256,356, almost 40% higher than this time last year. For more on the current jobs shortage, click here.
On the markets, at 12.50pm the S&P/ASX200 is down 0.7% to 6611.2, thanks to a weak US lead, while the Australian dollar is trading at US87.47c, down on Friday’s US87.95c Sydney close.