There may have been a slight cooling in Canberra’s tight rental market over the September quarter, but without any change to housing supply, rents are expected to ramp back up again with the annual influx of new workers and students over summer.
CoreLogic’s Quarterly Rental Review shows Canberra bucked the national trend with a nearly -1 per cent fall in house rents and a slowing in the rate of increase for units to 1 per cent, for an overall fall of -0.4 per cent.
Canberra recorded the weakest rental performance across both sectors but the median house rent of $730 a week remains the highest in the country, while the $582 a week figure for units is second only to Sydney.
This comes after a year of steady rent increases: 7.5 per cent for houses and 6.9 per cent for units.
Vacancy rates remain tight at 1.3 per cent. Twelve months ago, the vacancy rate was 1.2 per cent.
SQM Research reported a similar situation, a vacancy rate rising from 0.9 per cent to 1 per cent.
Real Estate Institute of the ACT President and Director of Property Management at The Property Collective Hannah Gill said the real heat and urgency had gone out of the market in some areas as part of a seasonal switch.
Cost of living increases and economic uncertainty were also playing a part.
“Clients and prospective tenants are a bit more price sensitive,” she said. “There’s a lot of uncertainty around with media reports making people a bit anxious.”
But Ms Gill expected that to change this quarter, with her agency already being inundated with interstate enquiries from people looking to move any time from November through to February.
Most of the enquiries came from professional people taking up public service work or private contracts and some students.
“The latest one is moving in February and starting to look now,” Ms Gill said.
The increased competition and the ongoing lack of sufficient supply would drive up rents and increase prospective tenants’ willingness to pay more.
“As we come into the end of the year, typically the really busy season, we’re going to see rents climb back up as we start to get 20, 30 people at a time wanting properties again,” Ms Gill said.
She said vacancy rates were steady at about 1 per cent when averaged out.
“It’s still a robust market. There is still an undersupply, and it’s still not a healthy vacancy rate,” Ms Gill said.
Complicating matters for tenants is the state of the housing market in Canberra where the high price of houses is driving potential buyers into the apartments sector or keeping them in the rental market.