When deciding on a rental agreement, price can be a big factor for anyone sitting on the fence. The median rent across Australia is currently $476 per week, according to a new report from property research house CoreLogic. In capital cities, it’s $492 per week, while the regional areas have it slightly cheaper at $441.
CoreLogic’s Rental Review for the June 2021 quarter shows that despite rental growth slowing over recent months, national rental rates are 6.6% higher than a year ago, which is the highest annual growth rate recorded in 12 years.
CoreLogic Head of Research Eliza Owen said rent prices had increased due to many of the same factors that led to the current housing price upswing, including increased government stimulus through COVID-19, accumulated household savings through lockdown periods, the swift economic recovery seen as restrictions eased and a lack of rental supply in some markets.
Here we break down the latest rent price results from CoreLogic for Australia’s capital cities.
Which are the cheapest cities to rent in Australia?
Taking out the top spot as Australia’s most affordable capital city to rent is Adelaide in South Australia. It currently has a median rent that is nearly $200 cheaper than the most expensive capital city, Canberra.
Below, capital cities are listed from the cheapest overall median rent prices to the most expensive, as calculated in CoreLogic’s June 2021 Quarterly Rental Review.
1. Adelaide – $430 per week
According to CoreLogic, the median weekly rent in Adelaide has gone up 7.2% over the past year to $430. Houses in Adelaide currently have a median rent of $448 per week and $365 for units. The gross rental yield (that is, how much rental income a landlord receives each year as a percentage of their property’s value) is 4.23%.
2. Melbourne – $444 per week
The median weekly rent in Melbourne has decreased 1.4% over the past year to $444, making it the only capital city to record a drop in rent prices in the past 12 months. Melbourne currently has a median rent of $482 per week for houses and $413 for units, and the gross rental yield is 2.83%. CoreLogic Head of Research, Eliza Owen, says there are signs that unit rents are stabilising, with values remaining flat over the quarter.
3. Perth – $472 per week
In the past 12 months, the median rent in Perth for all dwelling types has gone up 16.7% to $472 per week, and the gross rental yield is currently 4.33%. Houses in Perth currently have a median rent of $479, and $417 for units.
4. Brisbane – $476 per week
Median weekly rent values in Brisbane have gone up 7.3% over the past year to $476 across all dwelling types, according to CoreLogic. Houses in Brisbane currently have a median rent of $505 per week, compared to $414 for units. The gross rental yield is 4.11%.
5. Hobart – $499 per week
According to CoreLogic, median weekly rent in Hobart has risen 8.8% over the past year to $499. Houses currently have a median rent of $511 per week, compared to $432 for units. The gross rental yield is 4.19%.
Ms Owen said Hobart rent values took a hit at the initial onset of COVID-19, but had now recovered to record highs.
“Anecdotally, many short term accommodation holders had marketed their property on the long term rental market amid domestic and international travel restrictions. However, as domestic travel flows have somewhat normalised, save for sporadic lockdown conditions, the return of domestic tourism may have seen the reversion of this excess supply to short term accommodation,” Ms Owen said.
6. Darwin – $548 per week
According to CoreLogic, Darwin’s median weekly rent increased 21.8% over the past year to $548. Houses in Darwin currently have a median rent of $618 per week, compared to $444 for units. Darwin remained the highest -yielding capital city, with houses producing a yield of 5.58% and units 6.94%. The overall gross rental yield is 6.08%.
7. Sydney – $582 per week
Sydney is now the second-most expensive capital city on average for renters in Australia, with a median weekly rent of $582, up 3.2% year-on-year. The gross rental yield is currently 2.56%. Houses in Sydney currently have a median rent of $646 per week, compared to falling unit rent prices at $518 (-1.1%). Sydney unit rents are, however, starting to creep higher in recent quarters, up 1.8% in the three months to June, according to Ms Owen.
8. Canberra – $620 per week
Canberra is now the most expensive capital city on average for renters in the country. It has a median weekly rent of $620, up 7.3% over the past year. Houses in Canberra currently have a median rent of $668 per week and $521 for units.
Rent or buy in Australia: How does renting compare to home ownership?
CoreLogic’s findings from its June 2021 Quarterly Rental Review showed the median weekly rent across Australia is currently $476 per week. How does this stack up against home ownership?
If you take a home loan amount of $600,000 and the current average variable interest rate from Canstar’s database of 3.25% and a 30-year term, it would cost a homeowner $610 per week in repayments. This is in addition to any fees that a lender may charge and assuming that the rate stays the same over that time.
While this example shows weekly mortgage repayments can be higher than the median weekly rent, it is important to note that it doesn’t take into account all home ownership and renting variables.
Also, everyone’s circumstances are different and so whether home ownership or renting is the better option for you will depend on your situation, including how much you would need to borrow to buy a home and where you live.