Adelaide the second cheapest rental city in Australia — by $1
Adelaide has been pipped at the post by Brisbane in claiming the nation’s affordable capital city rentals — but only just.
CoreLogic’s March Quarterly Rental Review, released today, indicates the median weekly rent for a property in the City of Churches is $386 — just one dollar more than Perth’s $385.
In comparison, Hobart, which has traditionally been seen as an affordable housing option, experienced the nation’s highest annual rent rise of 5.4 per cent to a weekly median of $453.
Melbourne rentals stand at $454 per week (based on medians) and Sydney remains the country’s most expensive capital, with rents of $582 per week.
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A LOOK AT THE NATION’S RENTAL RETURNS
The report shows Adelaide’s rental prices are rising slowly but surely — they jumped 0.8 per cent over the March quarter and 1.2 per cent over the past year, while gross rental yields have remained static over the year at 4.4 per cent.
Gross rental yield is a calculation designed to provide an indication of rental return over a 12 month period and involves dividing annualised rent by median sales prices.
Looking at rental yield nationally, Darwin comes in highest at 6 per cent, followed by Hobart at 5.1 per cent. Sydney and Melbourne come in lowest at 3.5 per cent and 3.6 per cent respectively.
The report states Sydney and Melbourne have traditionally been the cities that attracted the highest number of investors but suggests their “go to” status might be about to change.
“With gross yields at such low levels in these two cities we may start to see investors turn their attention to other cities, where housing is more affordable, capital gain opportunities are potentially better and rental returns are superior,” the report states.
INVESTORS TURN TO ADELAIDE
Real Estate Institute of South Australia (REISA) CEO Greg Troughton says SA property agents have already started noticing increased investor interest in Adelaide.
“The secret is out” he says.
“We are travelling well at the minute in comparison to the east, so more and more investors see Adelaide as an untouched opportunity for great investment returns,” Mr Troughton said.
Investors were drawn to Adelaide for “great value dollar-for-dollar compared to the eastern states, even with their double digit negative capital growth”.
He warned that difficulty obtaining loans and uncertainty surrounding the Federal election and the future of negative gearing could “temper” investor interest in the future.
But right now real estate agents were able to market its relative affordability.
“The value for money and returns has been a feature that REISA members have been mentioning for some time now and it looks to continue, Mr Troughton said.