Which cities are the best for renters now?
If you are living in a city like Melbourne, now isn’t a great time to be a renter. But, if you are renting in Sydney, you are likely to be in a much better position.
Here we look at how the rental market is affecting renters in each major city.
A strong rental market means you’ll be paying more
In Melbourne or Hobart rents have grown by over 15% over the past three years and strong rates of growth do not look to be ending. This trend suggests both rental demand and rent per week will continue to increase in these cities.
However, in cities such as Sydney or Darwin, renters are in a much better position. Much lower demand for rental properties means it is simply not as easy to find tenants in these cities and so renters have more power to negotiate.
Renting in Sydney or Darwin and still paying the same rent as you were 12 months ago? You should consider asking the landlord to reduce the rent, remember that lower demand means your landlord may struggle to find another tenant.
On a capital city basis, changes to rental levels vary, but there are certain suburbs that continue to be very popular with renters on realestate.com.au, seeing very high views per listing. Conversely, some areas are very unpopular with low views per listing.
Richmond sees the most views per listing in Melbourne right now at 3,500. In comparison, Macleod in the outer north-east sees only 820 views per listing.
This means that if you are looking to negotiate a better rental deal in a strong rental growth city like Melbourne, you would be more likely to succeed in Macleod than you would in Richmond.
Renters & the 2019 election
The federal election is just around the corner and the Labor Party has flagged potential changes to tax incentives for investors, which will subsequently affect renters.
Many investors have become reliant on negative gearing and capital gains tax concessions to ensure that investing in property is viable.
Without these incentives, we are likely to see a large drop in investor activity, which will flow through to fewer available rental properties and consequently, rising rents.
In cities where rental prices have been rising rapidly, it means the rises is likely to continue and may even accelerate.
While for places like Sydney where rents have been dropping over the past year, current conditions may be the best they will be for some time.