According to the latest Domain Rent Report, both cities recorded their strongest annual growth on record over the year to June, with median house rents now an eye-watering $600 per week in each hub.

Over the June quarter, vacancy rates also plummeted to their lowest in history – a painfully tight 0.4 per cent in both – creating the most severe rental conditions in the country amid reports some businesses are battling to find hospitality and retail workers due to the lack of housing.

Domain chief of research and economics Nicola Powell said that while soaring prices spelled good news for landlords and investors, there was no end in sight for struggling tenants with local wages growth unlikely to support ongoing rent hikes for much longer.

“I think it will get to a point where the rate of rent growth (in both cities) is unsustainable against the backdrop of weekly wages growth and there’s only so long tenants can withstand it. [House rents are] up $100 on the Sunshine Coast and $90 on the Gold Coast. Sunshine Coast unit rents have surged $75 over the past year to a median of $495 a week, while the Gold Coast median unit rent is $55 higher to $485,” Dr Powell said.

“Landlords are clearly cashing in on improved household budgets and increased interstate demand to boost yields … however it does put tenants in a vulnerable position.”

While both cities are no strangers to booms and busts, Dr Powell said the current rental market surge was faster and more furious than any previous ebbs and flows on the Gold Coast and Sunshine Coast, with every new lockdown in the nation’s major southern cities only fuelling the sea-change fire.

“Interstate migration is a big part of the rent rise … and anyone moving from interstate – if they are remote working and keeping a higher paid job – might have more cash to spend on rent, so it’s likely that bidding wars happening right now,” Dr Powell said.

“The other point is that the vacancy rate is tightening … with both of them edging to zero … so conditions are extraordinarily tight compared to other capitals.”

According to the Domain Rent Report, houses in the Gold Coast suburb of Southport recorded the biggest quarterly jump in the median weekly rent of 9.1 per cent to $600, while on the Sunshine Coast, houses in the Noosa Hinterland were the clear winners after a 7.8 per cent quarterly hike sent the median weekly rent to $620.

Source: https://www.domain.com.au/news/