Sydney rents continue to climb

Sydney-rent-prices-recorded-new-highs-in-December-2014_157_6002109_0_14042573_300Prices for rental properties in Sydney look set to continue their upwards climb, with Domain Group’s Rental Report for the December 2014 quarter indicating that rising construction and investment activity is not likely to provide tenants with much relief. However, the capital growth opportunities for those looking to property investment in the New South Wales capital are plentiful.

According to Domain Group’s report, the Australian rental market remains in ideal shape for property investors, with the national average asking price for house rent up by 0.6 per cent while unit rents increased 0.1 per cent. Sydney in particular is showing strong growth in this area.

The city’s rents remain the highest of all the capitals across the country and rents have continued to rise over the past year. They climbed a total of 4 per cent to a new height of $520 per week over the 12 months to December 2014, with unit rents also recording increases to an average of $500 a week. In the last quarter alone house rents have experienced a 2 per cent rise, with units up 1 per cent in the December quarter and 2 per cent over the past 12 months.

Gross yields across the country either met or surpassed previous averages across the quarter. Opportunities for strong rental yields may be more apparent outside of the country’s two major cities, but Sydney and Melbourne recorded positive results in this regard for December.

The Domain Group Senior Economist Andrew Wilson says rising rents, tight vacancy rates and reasonable gross yields are balancing concerns about over-investment in residential market, particularly in Sydney. Moderated price growth across the property market, combined with these rising rents, is also providing some solace for investors country-wide.

“Flattening price growth and rising rents are putting a floor under gross yields which had been declining due to recent strong prices growth,” he said.

“Upward pressure on rents is set to continue through 2015, particularly in the robust Sydney market where underlying demand continues to outstrip supply.”

With Sydney’s investment property market in such strong stead, it might be the ideal time discuss how your rental property portfolio can be expanded to incorporate this budding sector.

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