- Asking price for rentals increased 2.5% in the September quarter
- The quarter also marked a comeback in unit rental yield
- Domain has released new research into the state of the rentals in Australia
Asking rental prices rose 2.5% across both units and houses in the last quarter for the combined capital cities, according to the latest rental report from Domain.
This spike is significant as it marks the first increase in unit rents since before the pandemic.
Tenants are starting to ease back into apartment living as the asking rents for houses continue to hit record highs rising 5.5% over the year.
Dr Nicola Powell, Domain’s Chief of Economics and Research, commented that the shift is being driven by affordability. She explained that people are either being pulled by the incentive of a better deal or pushed by the high house prices.
Quarterly change in weekly asking rent (Combined capitals)
An initial impact of lockdowns was a higher demand for space. This was a factor in the fall of unit rents during the pandemic.
Although demand for units is recovering, the desire for space is still strong.
“Space is an important factor for tenants who may have a family or need to share a house.”
Dr Nicola Powell, Chief of Economics and Research, Domain
“In some cities, it’s clear that tenants are willing to pay a premium for space necessary for their lifestyle, as house rents achieve highs and rise at a faster pace for rentals with more bedrooms,” said Dr Powell.
Reaching a record low, the rental yields for houses reached 3.56% in the last quarter for combined capital cities.
This is attributed to house values rising at a faster pass than rentals.
For units, rental yields experienced a slight comeback, increasing 3.95% from the previous quarters.
This indicates a 1.1% increase from the record low rental unit yield of the previous quarter.