Apartment rental prices are rising at the same pace as house rents for the first time since the pandemic, in an early sign that renters are flocking back to CBDs and apartments for affordability, new data reveals.
Domain’s latest Rental Report found that house and unit rent both rose 2.5 per cent over the September quarter.
Unit rent prices in Sydney and Melbourne ticked up for the first time in more than a year between July and September, the report revealed. In the same three-month period, rent prices for houses in Sydney, Brisbane, Adelaide and Canberra hit a record high.
Domain chief of economics and research Nicola Powell said tenants were being put off by rising rent prices of houses, and considering apartments for their new home.
“We’re seeing renters in cities such as Sydney, Melbourne, Canberra and Brisbane start to consider apartment living as an option shown by the unit rent increase, largely being driven by affordability,” Powell said.
“In some cities, it’s clear that tenants are willing to pay a premium for space necessary for their lifestyle, as house rents achieve highs and rise at a faster pace for rentals with more bedrooms,” Powell added.
Meanwhile, house rent prices in Melbourne are the lowest among all of the capital cities, with several lengthy lockdowns driving residents out of the state leading to weak rental growth.
The good news is that Melbourne renters can take advantage of the lower prices, according to Powell.
“It is a good sign for tenants who are wanting more space and now is the time to negotiate on asking rents to secure a good deal.
“However, we have seen that vacancy rates have continued to decline, suggesting that the empty pool of rentals will continue to shrink and rents will not stay this low for much longer.”
How to hang onto your low rent
Eviction moratoriums were implemented at the height of the pandemic to protect tenants who had lost work hours or their employment from being kicked out of their homes.
The federal and state governments also encouraged landlords to work with tenants to negotiate lower rates or payment plans.
However, with unit and apartment rent prices rising again, experts are reminding Australians there are tips and tricks they can use to keep rent prices down.
For starters, Aussies hit hard by the pandemic will still be able to negotiate a payment plan up until 11 November because of the moratorium, said RateCity research director Sally Tindall.
“The key here is to have regular, open conversations with your agent and owner to make sure they understand the financial difficulties you’re under. Landlords in NSW can potentially apply for financial support for reduced rent they offer their COVID-affected tenants,” Tindall said.
The other thing is to do your due diligence and make sure you understand how much rent prices are for similar properties in your local area.
Often, it just comes down to supply and demand, she said. “So if you can prove there are plenty of affordable options nearby, then you might be able to ward off a rent rise.”
Your landlord will likely want to keep you if you’re a good tenant, as finding new ones are an expensive, lengthy process that will result in lost income for landlords.
“Consider taking on a longer lease in return for a slight rent reduction. It’s a win-win for the landlord who won’t have to find new tenants on a regular basis, and you’ll have fixed rental costs for a longer period,” Tindall said.
But if you’re not able to keep those rent increases at bay, you’ll have to think of other ways, such as considering another flatmate or renting out your car space.
Then if that doesn’t work, you may have to look elsewhere at more affordable areas with higher supply keeping rent rates low.
“While moving can be an expensive exercise in itself, it’s a one-off cost which can often be better than overstretching yourself week after week from shelling out more rent than you can afford.”