Canberra's hard-pressed residential tenants and prospective renters have been offered a glimmer of hope, according to a new report.
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The Domain Rent Report for the March quarter, released on Thursday, revealed that Canberra's median weekly rent had stabilised after growing annually since September 2019.
The city's median asking rent for a house was $690 a week, a record figure that remained unchanged over the quarter and year. By comparison, Sydney's median asking rent was $660 a week, an increase of 1.5 per cent over the quarter and 10 per cent over the year.
While it's welcome news for tenants looking for a property, Canberra continues to hold its title as Australia's most expensive city in which to rent a house.
"Overall, the equation is still tipping in favour of landlords, but price stability over 12 months is a solid indicator that the market is moving away from the volatility we have seen in home rentals," said Domain chief of research and economics Dr Nicola Powell.
"There's more supply coming into the market, and contributing factors may also include more renters becoming buyers. We have also seen negative migration - more people leaving the ACT than arriving."
The director of property management at The Property Collective, Hannah Gill, echoed Powell's latter observation, noting that the first quarter of the year had been the "strangest" in her experience of more than a decade in the sector.
"It's been incredibly quiet during a time when we usually see a big annual influx of new workers and students," she said.
"And there's been a shift in what people are looking for - we've seen families opt for smaller homes or apartments instead of, say, larger three to four-bedroom homes. That's a big indicator of price sensitivity."
When looking at a suburb level, several suburbs bucked the stability trend, including houses in Pearce, up 15.4 per cent over the year to $750 a week, and Mawson, up 12.9 per cent to $700 a week.
Meanwhile, suburbs such as Throsby and Denman Prospect saw the median asking rent for a house drop by more than six per cent. Throsby was down 6.7 per cent over the year to $760 a week and Denman Prospect was down 6 per cent to $740 a week.
Better Renting advocacy director Bernadette Barrett said that, while signs of stabilisation were welcome, rents were still unsustainably high.
"[Rents] are still absorbing as much as 40 per cent of weekly income and are increasingly unaffordable, especially for families," she said.
"The ACT CPI cap on rents does provide some certainty, but there needs to be more government assistance and support, especially for those on lower incomes."
Canberra apartment dwellers enjoyed even better news, with the national capital losing its title as the most expensive city in which to rent a unit.
The median asking rent for a Canberra unit was $550 a week, down 1.8 per cent over the quarter but up slightly by 1.9 per cent over the quarter. The quarterly drop is the first since mid-2020 and consolidates annual rent price growth at an almost three-year low.
Sydney units, on the other hand, recorded a median asking rent of $620 a week, up 6.9 per cent over the quarter and 24 per cent over the year. The harbour city has taken the crown as the most expensive in which to rent a unit.
Signs of this apparent overall rent price stabilisation in the Canberra market are further evidenced by an increase in the vacancy rate during the past 12 months.
Domain data revealed the combined house and unit vacancy rate measured 1.6 per cent in March, an increase of 0.5 per cent over the same period last year.
Powell welcomed the vacancy rate improvement as a further sign of an ongoing correction in market conditions.
"Rising investor activity is [still] needed, the build-to-rent sector advanced, additional rental assistance provided for low-income households, more social housing and assistance for tenants to transition to home ownership," she said.
"[But] it's certainly a big, positive movement from 12 months ago and the market could be said to have reached a position of balance once it gets in the range of two to three per cent. It's certainly heading in the right direction."
