Rents are growing at a faster rate than property prices, new research has found.
According to RP Data’s latest property pulse, in the five years to February 2011 capital city rents grew faster than property values.
“The debate over affordability in the past five years has intensified, however, what is often missed is the fact that over this time capital city rental rates increased at a greater average annual rate than capital city property values,” RP Data’s research analyst Cameron Kusher said.
Darwin and Melbourne saw the biggest increase in rents, with the average rental rate for houses growing by 10 and 7.5 per cent respectively.
Mr Kusher said the rising rate problem was unlikely to be rectified any time soon.
“With investors and first home buyers reluctant to spend at the moment, coupled with housing affordability stretched because of recent value growth and a weaker period of interest rates and construction for the remainder of 2011, we anticipate that this will put upwards pressure on rents,” he said.
“In addition, rental growth has been sluggish for quite some time – we expect there to be improvements increase the rents.”