Interpac Business and Migration Solutions Melbourne Australia

（September 8, 2010）

RENTS across capital cities have gained at more than double the rate of inflation in the past five years.

But a slower pace of growth is anticipated for the remainder of the decade, according to property research firm rpdata.com, The Australian reported.

Houses in the country's prestige suburbs staged both the best and the worst performance during the 2010 financial year, as the rental market remained mostly flat, according to rpdata.com's June 2010 Quarterly Rental Review.

In the capital cities, Vaucluse in Sydney's eastern suburbs topped the list for the highest growth rate in median house rents during the year to June. The worst performer was Perth's prestige suburb Applecross.

McGrath Real Estate's Michael Conolly, head of the network's property management, said that in the aftermath of the global financial crisis, highly paid executives had moved back to Australia, or had sought temporary accommodation amid home renovation work during the year. They chose Vaucluse because of its easy access to some of the city's most exclusive schools.

The suburb's gains followed a 20 per cent fall in its rents amid the GFC, Mr Conolly added.

Rpdata.com research analyst Cameron Kusher attributed Applecross's poor rental performance to weak demand and buyer discernment. "They were in the position to be a little more choosy," he said.

Rents in Sydney's Vaucluse, where the median home price is more than $3.1 million, saw a 35.4 per cent lift in weekly rents to an average of $1625. In Applecross, where average home prices are $1.8m, rents fell 38 per cent for the year to an average $500 a week. In the past five years, rents for houses gained 40 per cent and nearly 46 per cent for units.

While the cost of accommodation climbed about 10 per cent a year, inflation gained about 3 per cent and home prices about 7 per cent. "I wouldn't expect that much over the next five years," Mr Kusher said. "I think for the next couple of years (it will be) above inflationary levels, but I don't know past a couple of years."

Rental rates and demand would grow on the back of higher immigration numbers, a slowing in house price growth and fewer first-home buyers, Mr Kusher said. He also noted that of the 40 top performing suburbs analysed, 28 were in Sydney, mainly because there were more suburbs in the NSW capital than elsewhere.

Nationwide, house and unit rents rose 2.9 per cent in the year.

(Source: news.com.au)