Apartment sales volume, capital values and rents grow: Knight Frank
Apartment rents Australia-wide rose 2.4% over the year to September to arrive at a median price of $420 per week, with total vacancy increasing to 3%, according to the 2015 Q4 residential review from Knight Frank.
The review found apartment sales volume, capital values and rents grew nationwide despite gross rental yields tightening in the September 2015 quarter.
Michelle Ciesielski, director of residential research for Knight Frank said in September 2015, gross rental yields for Australian apartments averaged 4.64%.
"Over the year to September 2015, Australian apartment capital values have experienced 7.7% growth with the last three months of this period recording growth of 2.4% to stand at a median capital value of $473,500," she said.
"Capital growth amongst the capital cities has continued to be led by Greater Sydney (at 15.6%), Greater Hobart (at 5.8%) and Greater Melbourne (at 5.4%) over the past year.
"When utilising growth in sales volume as a leading indicator, it would be expected that Greater Brisbane and Greater Melbourne are likely to witness further capital growth heading into 2016. Greater Hobart and the Australian Capital Territory (ACT) are displaying signs of a potential upswing over the medium term for capital growth after experiencing negative growth in 2014.
"Highest annual rental growth is still being experienced in Greater Sydney, at 5.7% over the year to September 2015 while achieving a median rent of $560 per week. Although since mid-2015 rents in Greater Sydney have remained steady as total vacancy has fallen from 2.1% to 1.9% over this time, it is likely we will once again see a rise in rents early in the new year.
"With continued negative growth in apartment capital values over the past year, Greater Darwin recorded the highest gross rental yield at 5.87% in September 2015, although rents continued to fall throughout this period. As shown in Figure 4, Greater Sydney returns the lowest gross rental yields across Australia, at 4.30%. When plotted over a five year range, current yields in Greater Sydney are at the lower end of the range; a similar experience being recorded by Greater Brisbane and Greater Perth."
