Sydney rents will increase by up to 4.4 per cent this year as economists predict an end to the sluggish growth of 2009.
A healthy economy, rising interest rates, and land tax increases would all push up rents beyond the 2009 increases of 2.2 per cent for houses and 2.4 per cent for apartments, an economist has told Fairfax media.
"It is clear that in 2009 rents were generally kept in a holding pattern as landlords and the market waited to see the end of the global financial crisis," Matthew Bell from Australian Property Monitors told The Herald.
"Sydney rents are likely to increase by at least double the 2009 rate of 2.2 per cent to approach the $500 per week level for houses."
Sluggish growth
Rents for homes across Australia increased nationally by a mere two per cent in 2009 - the weakest annual increase since 2002, a new report says.
The figure compares with average annual rent increases of 12 per cent across Australia for 2007 and 2008, Australian Property Monitors' Quarterly Rental Report says.
Mr Bell predicts Sydney rents would increase by at least double last year's rate, with the median rental house in Sydney likely to approach $500 a week in 2010.
Around the nation
Melbourne property rents were "totally flat" in 2009 but were expected to rise by five to seven per cent in 2010, in line with their long-term growth rate, Mr Bell said.
In Perth, median home rents could hit $400 a week - a rise of 11 per cent compared with 2009.
Brisbane rents are likely to increase from an average $360 a week in 2009 to $400 in 2010.
"Although rents should rise across the board, an improving employment outlook will mean more income for renters to be able to cope with these increases in 2010," Mr Bell said.
"However, this is just another cost on already tightening budgets for those Australians that did lose their jobs or were forced to move to part-time work during 2009," he added.
"The rental increases set for the year ahead will mean families will have to chase more affordable rentals even further from areas of potential employment."
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