Median asking rents for houses in Australia increased nationally by 0.7% while apartment rents went up by 2.5% in the there months ending in June, the latest report shows.

In Sydney over the June quarter rents for units have surged as demand continues to increase for apartment style living over the typically more expensive housing option. The median weekly asking rental for Sydney units rose by 4.4% over the quarter to $470.

"Increasing demand by tenants for Sydney apartments reflects growing interest for this type of accommodation that typically is located closer to the CBD and provides more established urban infrastructure. Sydney’s rental market remains highly competitive for prospective tenants with low vacancy rates being recorded in most areas," said Andrew Wilson, senior economist at APM.

"Melbourne remains the most tenant friendly market of all the mainland capitals with rental growth for both houses and units having been subdued for some time. With comparatively high vacancy rates in most areas and a raft of new apartments in the pipeline this is expected to continue,’ explained Wilson.

In Perth, median weekly asking rentals have risen markedly over the June quarter with house rents up by 7.5% to $430 and unit rents up by 8.6% to $380. Wilson said that these rises will likely continue with Western Australia’s population set to grow by over 3% in 2012 placing upward price pressure on a Perth rental market already characterised by a shortage of accommodation.

Although Darwin recorded significant rental growth for both units and houses over the June quarter, much of this can be attributed to seasonal effects that are characterised by extreme quarterly fluctuations typical of this market, Wilson pointed out.

"The strong capital growth prospects for Sydney, Perth will act to dampen gross yield increases despite rent rises. This will nonetheless prove increasingly attractive to investors seeking capital gains as recoveries in the price cycles become increasingly evident,’ added Wilson.
 

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