Australia’s property markets may have been running at different speeds due to coronavirus lockdowns and border closures this year, but latest demand data shows some areas have stronger interest from renters than others, particularly the virus-hit Victorian capital.
New realestate.com.au data has revealed the most popular suburbs for renters across Australia for the 12 months to August 2020, with Melbourne locations dominating the top 10 for both houses and units.
- Use the interactive below to discover how well your suburb has performed over the past 12 months
Affluent South Yarra, Toorak and Hawthorn in Melbourne’s inner east were the top three locations for rental houses, while Stirling in the Adelaide Hills came in fourth – the only non-Victorian suburb to make the cut.
The data is based on high-intent renter activity per listing on realestate.com.au for the 12 months to August 2020, which refers to activity such as multiple views of a listing and enquiries – essentially, searchers who are actively seeking a rental rather than browsing.
Lachlan Fox from RT Edgar Toorak said while there isn’t a lot of renting going on in Melbourne during stage four restrictions, the interest in premium inner east suburbs showed their resilient appeal as aspirational addresses.
“One of the biggest reasons why people are moving into these areas recently is they are more affordable. Since the market has taken a bit of a hit, people in outer suburbs can now afford to live more inner city for the same type of rent,” Mr Fox said.
South Yarra is the most in-demand suburb for rental houses, new data shows. Picture: realestate.com.au
The inner northern suburbs of Collingwood and Northcote were fifth and sixth, followed by beachside St Kilda, inner city Richmond, Essendon in the north, and leafy Upwey in the Yarra Ranges.
Cameron Kusher, realestate.com.au’s executive manager of economic research, said the time period measured gave an insight into rental movements in the pre-COVID market, but said there could be different results in the near future.
“This data is measured over the past year and highlights that Melbourne is very much an in-demand rental location in usual times, particularly from recent migrants and overseas students… but it is yet to really show the impact of closed borders,” Mr Kusher said.
“I would expect in 6-12 months’ time, the Melbourne results will be much weaker. Before COVID, we were continuing to see strong migration patterns to Melbourne and the suburbs that are highly sought-after for people to own a home in are equally appealing to renters.”
For units, the top 10 suburbs were solely in Melbourne with the eastern suburb of Chadstone topping the list, followed by the inner northern hotspot of Thornbury and blue-chip East Melbourne.
Bayside suburbs were also popular for unit seekers, including Hampton East, Mordialloc and Parkdale. Inner city locations were also high on the list, including Northcote, Brunswick West and Fitzroy North.
Clarinda in the Melbourne’s south took sixth position, likely influenced by its proximity to the nearby Monash University Clayton campus.
Units in Chadstone in Melbourne’s east are in high demand for renters. Picture: realestate.com.au
Mr Kusher said the cross-section of locations across Melbourne reflected the diverse nature of renters.
“The areas listed here are typically further away from the city centre and I think it highlights what we often forget – that renting isn’t just an inner city phenomenon,” he said.
“Plenty of people who don’t work or study in the inner city rent, and they are much more focused on being close to their place of work.
“There was already a proportion of people that found the outer suburbs, with their additional space, appealing and if anything that will grow from here.
“I think it comes more down to price-point in the unit market and it seems that people are interested in more affordable markets close to the city.”
Where renters are seeking homes across the capital cities
In New South Wales, the top three rental suburbs for houses were Abbotsbury in Greater Western Sydney, Wamberal on the Central Coast, and Newport on the Northern Beaches.
Premium waterside suburbs were high on the list for units, with north shore enclave Kirribilli at number one, followed by Freshwater on the Northern Beaches and the harbourside enclave of Point Piper.
Kirribilli was the most sought-after rental suburb for units in Sydney. Picture: Getty
Mr Kusher said many renters are thinking about lifestyle and affordability when looking for a new home.
“Wamberal and Newport are much more lifestyle type markets whereas Abbotsbury is an outer more affordable market. We tend to think of rental demand being strongest in inner city areas but not everyone works in the city centre and wants to be close to it,” Mr Kusher said.
“People are perhaps thinking of buying in some of these lifestyle markets so are trying renting before buying. Meanwhile, Abbotsbury is close to employment hubs in Western Sydney,” he added.
Coorparoo, Paddington and Windsor had the highest demand for rental houses in Brisbane, while tenants looked for units in Paddington, Red Hill and Camp Hill.
These suburbs are in Brisbane’s popular inner ring, offering a range of stock, including charming Queenslander cottages, new apartments and family homes with backyards – all within easy distance of urban amenities and green space.
“To purchase in these suburbs is generally quite expensive but they are all close to the city centre and abundant local amenity. This is ultimately the reason why demand in these markets is so strong,” Mr Kusher said.
Canberra renters flocked to Yarralumla, Red Hill and Evatt for houses, and Casey, Lawson and Yarralumla for units.
Adelaide renters most wanted houses in Stirling, Unley and Parkside, and units in Norwood, Henley Beach and Kensington Gardens.
Paddington in Brisbane was popular with renters for both houses and units. Picture: realestate.com.au
Rental houses in Perth centred mainly on East Fremantle, Shenton Park and Wembley, with Shenton Park, North Perth and Cottesloe topping the unit rental search.
In Hobart, houses were most popular for renters in Battery Point, Sandy Bay and South Hobart, and units were in demand in New Town, Sandy Bay and Howrah.
Suburbs with highest growth in demand year-on-year
Looking at year-on-year growth in demand for rental suburbs across Australia, the list is vastly different – predominantly comprised of outer suburbs in Sydney, inner Canberra and pockets of Adelaide and Perth.
With a massive 288.3% rise in demand year-on-year, Austral in Sydney’s outer west saw the highest growth compared to August 2019.
Local agent Joe Karafistan, director of Camden Property Agents, said the area has become popular for renters seeking brand-new homes close to established hubs.
“Austral is still really close to Liverpool and West Hoxton, which are older areas now, and people are upgrading and want a newer home. The whole area was just rezoned so there’s hundreds of new homes,” Mr Karafistan said.
Austral in Sydney’s outer west experienced the highest growth in demand for the year. Picture: realestate.com.au
“It’s that little bit cheaper to move south or west and they get a brand new house. It’s near the new Lavington train station, and that’s what West Hoxton doesn’t have, a train line.”
The second-highest increase for houses was in Page, in the Belconnen district of Canberra, at 182%. It’s a well-established suburban area with a mix of affordable rental options and a median rent of $495.
Burnside, a young suburb in Melbourne’s outer west, came in third with 171% growth in demand. A number of developing land estates provide new family houses with an affordable median rent of $420.
The highest increase in demand for rental units was in Albany Creek, about 18km north of Brisbane, with a massive 320.1% lift.
This was followed by lifestyle suburb Rouse Hill at number two, in Sydney’s Hills District, with a rise in demand of 284%; and established Perth Hills hotspot Kalamunda at 209%.
What’s on the cards for the rental market in the next 12 months?
Mr Kusher said there will likely be some large reductions in rental prices over the next year, particularly for inner-city units in Sydney and Melbourne where the sources of demand have dried up due to coronavirus job losses.
“Houses overall are likely to hold up better in this environment as people will value having more space [post-COVID-19 lockdown]. Renters are likely to still be attracted to the inner city but it may be more tilted towards houses as opposed to units.
“There will likely be more renters looking at suburbs further away from the city, or even regional areas, given more people will have adapted to the work-from-home lifestyle with less need to be in a city office.”
Demand defined as high intent renter activity per listing for the past 12 months up to August 2020. Capital city defined by ABS’ Greater Capital City Statistical Areas. Suburbs with less than 30 listings were excluded.
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