Canberra has ended its reign as the nation's most expensive city in which to rent a house, following its steepest quarterly rent price decline in nearly a decade.
The latest Domain Rent Report, released Thursday, revealed house rents in the Australian capital had completely bucked the national trend - instead of posting record gains, rent prices fell by 2.2 per cent over the June quarter, dropping to $675 a week from $690.
Sydney has overtaken Canberra following a massive surge in house rents in the harbour city - prices there have now reached a record $700 a week.
It's a title Canberra's tenants will be more than glad to hand over, says Domain chief of research and economics Dr Nicola Powell, following years of volatile rents and continually soaring prices.
"Canberra has been the most expensive capital to rent a house in Australia since 2018, so this will be welcome news," Powell says.
"While a $15 decrease may seem modest, it is in stark comparison to the rapid escalation of house rents that had preceded it.
"And, look, Canberra tenants will still want a greater adjustment in asking rents - they'll want more relief than this - and if we continue to see the vacancy rate move higher, I'd say that's possible."
The median rental asking price for units remained stable at $550 a week.
Canberra's vacancy rate has increased to 1.9 per cent - up from 0.8 per cent this time last year - edging it closer to what's considered to be a more balanced rental market.
"Looking at the trajectory of Canberra's rental market more broadly, it's poles apart to what's currently unravelling in every other capital city," Powell says.
"So not only does this news give Canberra tenants and prospective renters some relief, it also - crucially - gives them leverage, giving some them some power back. It's vastly different to what's happening elsewhere in other cities where the rental market remains firmly locked in favour of landlords."
Across the ACT, rents are either falling or stabilising in every area.
Unit rents in Canberra's inner south and inner north both fell over the June quarter, while house rents flattened out.
The steepest price falls over the past three months were recorded in the Woden Valley region, which includes suburbs like Curtin, Mawson, Hughes, Chifley and Garran. House rents there have dropped by 5.4 per cent to a median asking price of $700 a week.
Across Canberra, it is the first time house rents have fallen annually since 2014. Powell says Canberra's supply-demand dynamic is out of step with most other capital cities in Australia.
"Firstly, I'd say the rental supply has increased more in Canberra than other cities, so there's simply more choice to start with," she says.
"The other thing is that the ACT's interstate migration has been negative. People are leaving Canberra rather than going there, so that takes pressure off supply."
The main differential to Australia's three largest capital cities though, is international migration, Powell says.
"The biggest pressure point on Sydney, Melbourne and Brisbane just isn't on the ACT. Those three cities are getting the bulk of the overseas arrivals and that's placing huge pressure on their rental supply," she says.
