Perth's rental market appears to be running at two speeds, with a massive drop in median rents in the inner city holding back a metropolitan market which grew by 4.4 per cent over the past quarter, a new report says.
Perth's rental market appears to be running at two speeds, with a massive drop in median rents in the inner city holding back a metropolitan market which grew by 4.4 per cent over the past quarter, a new report says.
Property analysts RP Data's quarterly analysis of the residential rental market revealed Perth suburbs accounted for the six worst performing capital city markets for house or unit rents, and a total of 20 of the bottom 35.
But median house rents in four Perth suburbs were ranked in the top ten best performing rental markets, RP Data said.
Median house rents in inner city Perth recorded the greatest fall in value across Australia, slipping 21.5 per cent from $650 per week to $510/week over the year to March 2011.
House rents in Mosman Park slipped by 6.7 per cent over the period, followed by units in Claremont at 3.8 per cent, houses in the Town of Vincent with a 3.2 per cent drop, and Fremantle rounded out the worst five performing suburbs with a 3 per cent slip in median house rents.
Median rent growth in the western suburbs, however, was a different story.
Median house rents in Nedlands grew 20.4 per cent over the year, while Claremont median house rents grew by 17.2 per cent. East Fremantle and Cottesloe houses were also ranked in the top ten best performing regions in terms of rental growth, at 16.7 per cent and 16.4 per cent, respectively.
Across the metropolitan area, Perth's rental growth rate of 4.5 per cent trailed only Hobart at 3.5 per cent, and Sydney, at 5.3 per cent.
The five-year average annual growth rate for capital city median rents is 7 per cent.
Sydney regions dominated the rental performance list, with 23 of the 35 best performing capital city suburbs over the past year.
RP Data analyst Cameron Kusher said he anticipated rental growth to be quite strong over the remainder of 2011.
"With tight rental vacancies and ongoing demand for rental accommodation, we expect that weekly rents will increase in most capital cities," Mr Kusher said.
"Although there was a surge in building approvals last year, in many instances this new supply won‟t actually get to the market during 2011.
"Added to that is the strict bank lending criteria which now requires significant pre-commitment of sales within new developments.
"Because of this we are seeing fewer new high density developments taking place in inner city areas. These regions are particularly attractive for renters as they provide significant levels of amenity.
"With less new supply in most capital cities it is likely to create greater competition for available stock and result in rental increases."
