Rents soar across the nation

Rents soar across the nation

The low cash rate hasn't just resulted in cheap home loans for families and couples - investors are also well placed to expand their residential property portfolios.

Reserve Bank of Australia Governor Glenn Stevens has suggested a climate of low interest rates will prevail for some time - most recently on July 1, when commenting on the board's latest monetary policy decision.

However, investors may well be wondering just where to invest. A new report from Australian Property Monitors (APM) sheds light on the cities where asking rents are climbing, potentially putting more money in property owners' pockets.

"Australia's two largest capital cities recorded rental increases over the quarter in a sobering result for tenants. Other capitals, however, generally reported more tenant-friendly outcomes," stated APM Senior Economist Andrew Wilson in the June Quarter 2014 Rental Report.

The biggest year-on-year increase in median weekly asking rents for houses was in Melbourne (5.6 per cent), followed by Brisbane (2.6 per cent) and Sydney (2 per cent).

With regards to units, the greatest yearly growth was experienced in Darwin (5.8 per cent). Sydney crept in after this (5.3 per cent), followed by Hobart (4 per cent).

Dr Wilson noted that Sydney unit rents are the most expensive of all major capitals, reaching an average of $500 per week during June 2014 - only slightly behind the Harbour City's average house rents during the same period ($510 per week).

Rising rents may encourage existing tenants to rethink their borrowing capacity and start on the deposit-saving journey. With affordable fixed home loans offering home buyers certainty as to their exact repayments, homeownership may seem more realistic.

However, saving for a deposit while paying rent is no easy feat, meaning investors may be in a comfortable position for some time as rents soar across the nation. 

Image credit: Abbey Hendrickson