Another month, another record high for Australia’s rental market (AKA the Landlord’s market.) Nationally, the median weekly rent is now at $627, with rents now 8.5% higher than this time last year.
At this point, you could pretty much close your eyes and put a pin anywhere on a map of Australia to pick a good suburb to invest in, as rental growth continues to surge nationwide due to a dire undersupply of affordable housing.
Unsurprisingly, the latest Domain Rental Report published in March shows that Sydney is leading the pack when it comes to capital cities with the highest rental yields. The numbers are pretty staggering – both unit and house gross rental yields over the past 12 months have jumped a whopping 29.5% and 13.2% respectively.
Following the fastest annual surge on record, gross rental yields are at their highest since December 2020, while unit yields are at their highest ever recorded. The median rent in Sydney is now $750 per week, cementing its position as the most expensive city to lease in – and the hardest, too, with a record vacancy rate of 0.8%.
While suburbs within Sydney’s exclusive Eastern Suburbs remain obvious investment choices due to consistently expensive rents, a new contender has been crowned Sydney’s best investment hotspot. South-Western Sydney’s Bass Hill in the Canterbury-Bankstown region recorded a staggering 62.8% annual rise in weekly unit rent – up by as much as $270 per week.
Inner city suburbs Chippendale, Haymarket and Zetland all saw rental increases upwards of $150 or between 27%-29.5%, likely spurred by the highly competitive student market.
Meanwhile, the suburb of Oran Park within the Macarthur Region saw unit rents increase by 29.3%, now at a median of $530.
Inner southern suburbs Rosebery and neighbouring Mascot also experienced steep apartment rent increases, up 29.3% and 28.9% respectively, while rents surged by as much as $375 per week in Harbourside suburb of Barangaroo (cc: Landlord’s market).
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For houses, Rose Bay recorded the biggest jump with a 55.6% rebound in median house rents, up $750 to $2100. Ultimo came in second with a 35.4% increase in the median weekly rent, while Appin, a suburb on the south-west fringe of Sydney came in third with, up 35.4% to $650 per week.
With unit yields up 23.6% and houses at 14.4%, forever bridesmaid Melbourne came in second for capital city rental growth, with units in the inner city seeing rent increases of over 46%. Taking third place for house rents is Brisbane, up 12.9% YoY. In Brisbane, key investment hotspots are the suburbs of Brisbane West, Flinders View, and Collingwood Park, with rents increasing by up to 56.2%. Recording 9.7% growth for unit rents, Brisbane is also an enticing investment option, not only due to its growth but also its slightly less competitive market compared to Sydney and Melbourne.
