Canberra rents skyrocket, now third highest in the country
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Canberra rents skyrocket, now third highest in the country

The cost of renting a house in Canberra has skyrocketed eight per cent in a year, and is now the third highest in the country behind Darwin and Sydney.

Apartment rents are second only to Sydney, according to new data released on Thursday by Domain, owned by Fairfax.

The median cost of renting a house was $540 a week in December.

The median cost of renting a house was $540 a week in December.Credit:Louie Douvis

The median cost of renting a house in Canberra was $540 a week in December, up from $500 a year earlier. Nationally, the median rental was $435, on par from a year earlier.

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Domain data scientist Dr Nicola Powell said Canberra had broken a new record for median house rent.

"It's one of the strongest quarter-on-quarter growth compared to all the other capital cities, which there is quite an astounding level of growth," Dr Powell said.

"We are seeing a stronger market and one of the big changes we've seen in the market is not only supported by low interest rates, but it is the fact that we have a strong level of population growth."

Dr Powell said the spike could be a result of migration from interstate. In 2014-15, Canberra had a negative interstate migration rate, but it turned around in 2016 and has been positive since.

"It's the interstate migration and overseas migrations as well which is really pushing the demand for rental accommodation," she said.

"If you think about it, if you're moving interstate or overseas, the rental market is probably be your first call before you hop into the sales market."

House rents in Darwin and Sydney are highest in the country, at $550 a week. But unlike Canberra, both cities experienced little change over the year. In Darwin, the median weekly rent for a house was unchanged on a year earlier, and in Sydney it increased by $10.

Other cities are well behind. In Melbourne, the median cost of renting a house was $425 in December, $115 less than Canberra.

The scene is similar for apartments, which cost a median $430 to rent in Canberra, the second most expensive rent in the country, behind Sydney, at $545. In Darwin, apartments costs a median $415 and in Melbourne $400.

The pace of change was less marked for apartments, with Canberra rents increasing $10 over the year, from $420 in December 2016.

"If you compare Canberra directly to Melbourne which is $425 for a house and $400 for a unit, the thing is, Melbourne is much larger, so what Melbourne has is the capability of providing affordable housing on the outskirts of greater Melbourne, particularly out west," she said.

"Canberra is a small territory, we also have a very high average wage.

"For those tenants that are trying to look for affordable housing - there are affordable housing in the neighbouring areas such as the greater Queanbeyan which has a much lower price point for tenants who want that more."

Acting director of the ACT Council of Social Service Craig Wallace said he was not surprised at the figures.

"We've been saying for a number of years the ACT government needs to take urgent action to address the lack of affordable rental housing for people here in Canberra," Mr Wallace said.

"The fact is we've got a tale of two cities, if you're doing well on a stable income it's possible to find a pathway into home ownership but the real affordability problem in Canberra is the lack of affordable private rental for people who are struggling.

"We're talking about a housing crisis here in the ACT."

Housing Industry Association ACT executive director Greg Weller said the decline in detached home building over recent years in the ACT has put pressure on the rental market.

"While apartment building has performed relatively well, the absence of a robust new home market has meant families have had to compete harder to secure rental properties," Mr Weller said.

"Canberra has one of the highest population growth rates in the country of 1.6 per cent per annum, second only to Melbourne, which is contributing to pressure on rental options."

He said vacancy rates in Canberra had fallen over in 2017 which made the capital the "tightest rental market in the country."

"The high rents in Canberra are good news for landlords, if not the renters,"

"After a period of negative rental growth for investors between late 2013 and 2016, rental growth had reached 1.8 per cent by late 2017."

- with Kirsten Lawson

Han Nguyen reports on property for The Canberra Times. She joined the Times in 2017 after working as a breaking news reporter at The Sydney Morning Herald.

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