Sydney unit rents up 10% in flat market as capital growth stalls: Residex
Sydney apartment rents have risen almost 10% over the past year, compensating investors to a degree for a lack of capital growth, according to the June property update from Residex.
Figures compiled by Residex show that nationally unit prices increased modestly by 1.24% over the quarter to a median of just under $400,000.
Sydney unit prices were virtually unchanged over the quarter at $490,000 – up just 0.18% – and have risen only 1% over the past year.
In comparison, rents are up 9.78% over the past 12 months to a median of $505, making it one of the strongest-performing capital city apartment markets over this period.
The strongest rental growth was recorded for Perth units, where the median rent rose 12.2% over the past year to a median of $415.
In comparison with a more than 4% drop in Perth house prices over the June quarter, Perth unit prices increased by 7.45% over the three-month period to a median of $421,000.
Melbourne unit prices dropped nearly 1% over the quarter to be down 4.43% for the year with a median price of $428,000.
The June results will disappoint Brisbane apartment investors – the inner-city Brisbane market is awash with more than 40 new apartment projects, with capital growth stalling over the quarter (down 0.18%) curtailing annual growth to 2.92% and a median price of $349,000.
In addition, rents have gone backwards over the past year, falling 2.78% to a median weekly rent of $350.
Figures compiled by Residex suggest the Brisbane unit market is one of the most affordable in Australia, with 28% of median household income required to meet median loan repayments, compared with 37% in Sydney and 34% in Sydney.
The Mark at Sydney's Central Park
Now, all signs point south for this market. A year ago vacancies were near zero but today they’re approaching 5%. Price growth has stopped and, according to Australian Property Monitors’ price graph, has started to dip below the red line.
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