Why the cost of renting a city apartment is now on par with houses
A perfect storm of changing demographics and construction delays is increasing demand in Australia
3 min
The median asking rent for an apartment in Australia’s capital cities is now on par with houses at $600 per week. This follows an extraordinary almost 25 percent surge in city apartment rents over the past year alone, compared with a 13.2 percent lift in house rents, according to Domain’s September quarter rent report.
The report’s findings are remarkable given units have reliably offered cheaper accommodation than houses historically. The $600 per week median was recorded across the combined capital cities, whereas in regional areas, median unit rents are still well below houses at $450 per week compared to $520 per week. The report reveals the Australian market has gone through the longest period of continuous rental price growth on record. The September quarter marked the 10th consecutive quarter of house rental growth (up 3.4 percent)and the 9th consecutive quarter of unit rental growth (also up 3.4 percent).
Apartment rents have surged the most over the past year in Sydney, Melbourne, and Brisbane, where weekly rents have risen by about 20 percent to record highs of $680, $520 and $550, respectively. Unit rents are also at a record high in Adelaide at $450 and Perth at $500. Across the other capitals, median unit rents are $450 in Hobart, $520 in Darwin and $550 in Canberra.
The key traditional drivers in Australia’s long-term shift to apartment living have been greater supply of apartments than houses, especially in popular urban suburbs with major infrastructure, and comparative affordability. Another factor is the increasing number of Australians living alone. Some are younger people who are increasingly delaying marriage until later in life. Australia also has an ageing population, so there is a rising number of older people living alone following the death of a spouse or the end of a marriage.
Exacerbating current demand for apartments is an undersupply. New apartment approvals have fallen to their lowest levels in a decade, according to the Australian Bureau of Statistics. Approvals have dropped by 15.8 percent over the past year amid the construction industry grappling with a shortage of materials and labour.
Domain’s rent report also showed that record weekly house rents were reached or sustained in Sydney at a median of $720, Melbourne at $550, Brisbane at $590, Adelaide at $550, Perth at $600, and Darwin at $650 during the September quarter. In the other capitals, median house rents are $530 in Hobart and $655 in Canberra.
Canberra was the only city not recording a record unit or house rental value over the quarter. Interestingly, the ACT is the only state or territory with a rental cap in place. The cap limits landlords to annual rental increases at the territory’s CPI rate for rents plus 10%. The Federal Greens recently lobbied for a temporary cap across Australia to help tenants cope with a runaway market, but Prime Minister Anthony Albanese said such propositions were a matter for each state and territory to consider separately.
Domain chief of research and economics, Dr Nicola Powell said the previous “extreme paces” of rental price growth had now ended but they were still relatively high. Dr Powell estimates that Australia needs 40,000 to 70,000 more rental homes right now to balance the market. “This is a significant amount of rental stock needed to balance out the rental market today, and not taking into account future population growth and people arriving from overseas and people relocating,” Dr Powell said.
New CoreLogic data shows rental vacancy rates have fallen to new record lows of 1 percent across the combined capital cities and 1.2 percent across the combined regional markets. CoreLogic economist Kaytlin Ezzy said: “Record high net overseas migration, fuelled by a combination of an increased flow of new arrivals and weaker departure numbers, coupled with a continued shortfall in rental listings, saw the vacancy rates falling to new record lows.”
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
A new AI-driven account by leading landscape architect Jon Hazelwood pushes the boundaries on the role of ‘complex nature’ in the future of our cities
2 min
Drifts of ground cover plants and wildflowers along the steps of the Sydney Opera House, traffic obscured by meadow-like planting and kangaroos pausing on city streets.
This is the way our cities could be, as imagined by landscape architect Jon Hazelwood, principal at multi-disciplinary architectural firm Hassell. He has been exploring the possibilities of rewilding urban spaces using AI for his Instagram account, Naturopolis_ai with visually arresting outcomes.
“It took me a few weeks to get interesting results,” he said. “I really like the ephemeral nature of the images — you will never see it again and none of those plants are real.
“The AI engine makes an approximation of a grevillea.”
Hazelwood chose some of the most iconic locations in Australia, including the Sydney Opera House and the Harbour Bridge, as well as international cities such as Paris and London, to demonstrate the impact of untamed green spaces on streetscapes, plazas and public space.
He said he hopes to provoke a conversation about the artificial separation between our cities and the broader environment, exploring ways to break down the barriers and promote biodiversity.
“A lot of the planning (for public spaces) is very limited,” Hazelwood said. “There are 110,000 species of plants in Australia and we probably use about 12 in our (public) planting schemes.
“Often it’s for practical reasons because they’re tough and drought tolerant — but it’s not the whole story.”
Hazelwood pointed to the work of UK landscape architect Prof Nigel Dunnett, who has championed wild garden design in urban spaces. He has drawn interest in recent years for his work transforming the brutalist apartment block at the Barbican in London into a meadow-like environment with diverse plantings of grasses and perennials.
Hazelwood said it is this kind of ‘complex nature’ that is required for cities to thrive into the future, but it can be hard to convince planners and developers of the benefits.
“We have been doing a lot of work on how we get complex nature because complexity of species drives biodiversity,” he said.
“But when we try to propose the space the questions are: how are we going to maintain it? Where is the lawn?
“A lot of our work is demonstrating you can get those things and still provide a complex environment.”
At the moment, Hassell together with the University of Melbourne is trialling options at the Hills Showground Metro Station in Sydney, where the remaining ground level planting has been replaced with more than 100 different species of plants and flowers to encourage diversity without the need for regular maintenance. But more needs to be done, Hazelwood said.
“It needs bottom-up change,” he said. ““There is work being done at government level around nature positive cities, but equally there needs to be changes in the range of plants that nurseries grow, and in the way our city landscapes are maintained and managed.”
And there’s no AI option for that.
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
