A decade ago Perth was Australia’s most affordable capital city but now its rental properties have become the nation’s second-most expensive, according to the latest PropTrack rental report.
Combined housing and apartment rents in Perth rose 18 per cent in the last 12 months, followed by Adelaide (11.8 per cent) and Melbourne (10.6 per cent).
An undersupply of rental accommodation had caused the price growth in Western Australia’s capital, PropTrack senior economist Anne Flaherty said.
Perth’s median advertised rent hit $650 per week in June, behind Sydney at $740 a week and ahead of Brisbane ($620), Darwin and the ACT (both $600), Melbourne ($575) Adelaide ($570) and Hobart ($510).
In the last 12 months, average rent across capital cities rose 10.3 per cent to $640 a week and rose 8 per cent to $540 in regional areas.
In the last three months, Adelaide rents had the fastest growth at 3.6 per cent, followed by Brisbane (3.3 per cent) and Perth (3.2 per cent).
Hobart and Darwin were the only cities that saw rents decline over the quarter.
However, over the last year everywhere in Australia except ACT and regional NT recorded price growth.
Unit rents have outpaced houses, both over the quarter as well as year-on-year.
This has narrowed the gap between the asking rents of houses and units, with houses commanding just a $30 premium in the capital cities, Flaherty said.
Home values nationally have risen by more than 35 per cent since the pandemic began in 2020 but growth has not been spread evenly, according to a separate report from real estate data company CoreLogic published last month.
Price growth across hotspots Perth, Brisbane and Adelaide has vastly outpaced gains posted in other urban centres, including Hobart, Melbourne, Canberra, Darwin and Sydney.
At one end of the spectrum, Perth has posted a 62.6 per cent increase in property values in that time, compared to an 11.2 per cent bump in Melbourne.
Australia’s ‘multi-speed’ housing market
There were several factors behind Australia’s “multi-speed” housing market, CoreLogic head of research Eliza Owen said.
When looking back over the past decade, the fastest-growing markets were generally starting from a low price base, with cities such as Perth and Adelaide “still playing catch up” to other capitals, Owen wrote in the report.
Some cities had experienced higher levels of home-building than others, which had helped keep a lid on price growth in places such as Melbourne.
There was also greater take-up of the and the HomeBuilder scheme in Victoria, Owen said, as well as a property investment boom in the mid-to-late 2010s that led to an influx of inner-city apartments.
Interstate migration trends were also playing a role in the multi-speed property market, with softer demand for homes in Sydney and Melbourne as NSW and Victoria lost residents to other states, particularly Queensland, during the pandemic.
Owen said there were reasons to expect the variety in price growth across the capital cities to hold at “relatively high levels” over the next few months.
Additional reporting by Australian Associated Press.
