House & Unit Rents Are UP 9.4% by Leigh Martinuzzi MPG

House & Unit Rents Are UP 9.4% 

by Leigh Martinuzzi MPG

In 2021 we saw an incredible increase in the dwelling prices across Australia with regional areas outperforming capital cities. Regional areas witnessed an increase of 25%, while combined capitals saw a 21% rise. National housing values increased by 22.1% and at the same time, the rental markets performed considerably well, too. Rental prices across the country ended the year up 9.4%. The driving force was tighter rental availability and heightened rental demand which is precisely what’s occurred in the sales market. 

Overall housing rents increased by 10.1% caused by higher demand for housing over units. Asking rents for units increased by 7.5% for the year. However, as rental prices for houses, which peaked in March, have risen to unaffordable heights we’ve now seen demand for high density and unit living start to increase. For example, in Melbourne unit rents dropped by 8.5% in March as people sought to escape inner-city living in favour of space. In the final quarter of 2021, the tables turned with an increase in unit rents by 1.6% compared to that of houses that went up 0.9%. 

With rising property prices and worsening affordability naturally rental yields haven’t been able to keep up the pace. Below is a chart that highlights rental yields across Australia. With property prices rising on average by 22.1% and rents by a lesser amount of 9.4% the return on investment in many areas around the country has weakened. Regional areas that still represent some level of relative affordability have more favourable rental returns whereas the worsening dwelling affordability in NSW and Victoria mean rental yields aren’t as attractive. Of course, when buying an investment property both the rental yields and future capital growth are important considerations.

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At MPG in association with LULULiV, we take care of all aspects of property management. If you have a property that you would like taken care of please give Leigh a call on 0490 812 205. We would love to assist. 

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