Landlords are more prepared to pass rising costs from interest rate rises on to renters after the average rental growth across capital cities in the March quarter rebounded to 1.5 per cent, according to Australian Property Monitors.
The rebound comes after a stagnant 12 months that saw flat rental growth in many markets across the country, with an average of just below 2 per cent.
The median weekly asking rent price for houses in Perth rose 2.8 per cent to $370 while for units, the asking price climbed 2.1 per cent to $358 a week in the March quarter.
Sydney recorded no increase in median rental prices for both houses and units for the March quarter while Melbourne experienced the first quarter of rental growth in 18 months, with a rise of nearly 3 per cent for houses.
Darwin saw the most dramatic increase, with rents growing 10 per cent in the quarter for houses and nearly 15 per cent for the year. Brisbane aligned with the national average, experiencing 1.4 per cent growth in houses and 1.5 per cent in units for the quarter.
Gross rental yields for houses in Perth edged 0.3 per cent higher in the March quarter while for units its surged 3.2 per cent.
As landlords begin to feel the pinch of recent interest rate rises, with the prospect of more to come throughout the year, landlords are more prepared to pass these costs on to renters in 2010.
"Considering national rents rose by more in the March quarter than in any quarter in 2009, it is clear that the factors that kept a lid on rents in most cities during the last 12 months are no longer apparent," said Matthew Bell, Economist for Australia Property Monitors.
"Job security and income growth has returned, and the historically low interest rates and the First Home Owner Boost that made moving from renting to ownership much more attractive in 2009 are long gone," said Mr Bell.
"Over the last five years, rental growth for most of the major capitals averaged six to seven per cent for houses and seven to 10 per cent for units. As the year progresses and the economy continues to improve, rents are expected to exceed these levels of long-term annual growth."
