Canberra remains most expensive city to rent as market tightens even further
The median rental price for a typical dwelling in Canberra during the December quarter was $651 per week. (ABC News: Liz Pickering)
Canberra's notoriously tough rental market appears to have reached new heights after an "exceptionally busy" period over the traditionally quiet Christmas season.
The capital's vacancy rate of less than 1 per cent resulted in long lines at open inspections over the weekend, as demand continued to outstrip supply.
"Average rents continue to climb both for housing and for apartments, in fact, Canberra is the most expensive city to rent in Australia," said Hannah Gill from the Real Estate Institute of the ACT.
"That's a real pressure point for our community because it shows that there's a real lack of affordable housing, and fit-for-purpose housing to meet the demand."
The latest data from CoreLogic shows it is still more expensive to rent in Canberra than anywhere else in the country.
The median price for houses rose 2.6 per cent in the December quarter to $714 per week while the median cost of units climbed 1.2 per cent to $541p/w.
"We've been seeing this same kind of pressure on housing affordability and supply now for two or three years, it's certainly not new," Ms Gill said.
But what is new, according to Ms Gill, is that demand didn't dip over Christmas and New Year, and the open home crowds that are usually reserved for December and January are turning out all through the year, including during winter.
"Over Christmas a lot of people couldn't travel, or chose not to travel, because of COVID, so a lot of clients – investors and tenants alike — were still looking to move things along, to rent out their properties and find properties to move into," she said.
The increased demand for rentals has come despite the return of international students being delayed.
"Normally, December through to January, February is our peak time of year … with lots of people coming from interstate, defence people, international students," Ms Gill said.
"[But] this year we didn't have that.
"So, what's really interesting is that we were still incredibly busy despite missing a major part of our rental market that we would usually see come into Canberra at this time of year."
Renters offering well above asking price
There has been so much interest in small units that some agents are no longer holding weekend inspections.
"As a business, we made a decision to stop showing certain properties on Saturdays," Ms Gill said.
"It was so busy: we were having 50 or 60 groups through say a one-bedroom apartment and we just couldn't safely manage COVID protocols, so we decided to change those open homes to mid-week to try and manage that people flow and keep our clients safe."
Weekend open inspections have been attracting as many as 60 groups of prospective renters. (ABC News: Peter Lusted)
The demand is also driving prospective renters to offer well above the advertised price, despite the fact rent bidding is illegal in the territory.
"It's a real shame because people shouldn't have to offer above advertised rates," Ms Gill said.
"But we're seeing a lot of prospective tenants offer above advertised rates, so that could range anywhere from $10 or $20 a week up to $50, $60, $70 a week, which over a 12-month period significantly stacks up."
One prospective renter told the ABC, he was even offering to pay up to six months' rent in advance to secure an apartment, after moving to Canberra from Brisbane with his partner.
"If they set the asking price as a range, we offer the highest asking price," he said.
"And paying rent three or six months in advance, just paying that up front, we have discussed that with real estate agents whether that could help.
"We're doing as much as possible just to increase our chances.
"There's a lot of pressure; we're competing with a lot of people."
Canberra has one of the tightest rental vacancy rates in the country, at less than 1 per cent. (ABC News: Michael Black)
Market 'to get worse before it gets better'
Ms Gill warned the market would only get tighter as the sector prepared for the return of international students.
"Unfortunately, I suspect it will get worse before it gets better," she said.
"We are going to see the return of international students and with a vacancy rate of under 1 per cent now, when we have 15,000 or 20,000 people return to the capital, where are they going to live?
"Student housing meets a certain demographic, but a lot of students will be looking for share-housing, larger established homes or apartment living off campus and there's just a real shortage to meet that need."