Canberra’s rental prices have continued to slump as the territory records close to the largest fall in median rents in the country over the past year.
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New data to be issued by Australian Property Monitors on Thursday shows the median weekly asking rents for houses have dropped 6.3 per cent to $450 and units have fallen 6.1 per cent to $385.
This is the worst performance in the country for units and the second worst for houses, behind Perth with a fall of 6.6 per cent.
The June quarter figures show the territory is the fourth most expensive capital city to rent a house and the sixth most expensive to rent a unit.
The rental report shows that while houses still retain their expensive status, when compared to other capital cities, units are now more affordable.
In the April quarter Canberra units were the third most expensive in the country but are now among the cheapest at a median weekly asking rent of $385.
Australian Property Monitors Domain Group senior economist Andrew Wilson said Canberra’s rentals continued their recent downward trajectory due to subdued housing conditions.
“There’s a consistently about the fall over the year for both houses and units and I do think it’s just generally a lack of demand for rental properties in Canberra,” he said.
“I think that does reflect what is an underperforming local economy concerned about job security.”
He said it was an economic scenario rather than a fundamental supply and demand imbalance.
Mr Wilson said rental growth for units nationally continued to outperform houses in most capitals, reflecting affordability barriers and lifestyle choices.
Sydney unit rents have reached a peak level of $500 per week and have grown by 5.3 per cent over the past year.
Independent Property Group’s managing director of property management Norm Honey said public service job cuts were not to blame for the rental falls in the ACT but an oversupply of properties certainly was.
He said there were about 3860 homes available for rent which was more than there had been at any time in the past decade.
“All it does is give the tenants so much choice,” Mr Honey said.
“It’s very close to a renters’ market.”
Confidence levels in the ACT property sector have also slipped to the lowest in the nation, new information shows.
The Property Council/ANZ Property Industry Confidence Survey’s index for the September quarter indicates sentiment in the territory is the lowest in the country.
The quarterly survey polls about 2300 property industry professionals across all states and territories on forward looking views regarding the business and political environment, the economy, employment intentions and other factors.
The ACT dropped two points to 101, which is the lowest level of confidence in Australia.
Property Council ACT executive director Catherine Carter said the latest survey showed sentiment could likely be attributed to a slow-down in construction activity across the territory, largely as a result of cuts in Commonwealth government spending.
ANZ senior property analyst David Cannington said the decline in confidence reflected a soft outlook for state economic growth, property construction and property sector employment.
“While the ACT economy has proven to be quite resilient, confidence has likely been weighed down by the Commonwealth government’s fiscal repair and the likely associated public sector job losses,” he said.