Insurance insights

Australia’s most expensive cities to rent

Jostling for top spot when it comes to hipness, greenness or home of the best coffee is something for which our capitals are renowned. And it’s often a ‘fight’ between Sydney and Melbourne, but what about in the rental stakes? When it comes to the most expensive cities to rent, it’s not the expected battle between the two most populous capitals…

The contenders for most expensive city are actually the harbour city and the nation’s capital!

When talking about median rents for houses, the mantle for most expensive is shuffled between Sydney and Canberra. According to Domain’s June 2023 Rent Report, Sydney overtook Canberra as the most exxy capital for the first time since 2018 with a median weekly rent of $700, compared to Canberra’s $675 per week. Hot on their heels was Darwin at $650 per week. But it was the West’s capital that had the greatest increase over the 12 months to June 2023, with median rents in Perth rising 16 per cent to $580 per week.

A recent surge in unit rental prices in Sydney (up 27.6 per cent over the 12 months to June 2023), saw the city become the most expensive (again since 2018) with a weekly median rent of $670 – far outstripping its closest competitor, Canberra where rents remained steady over the 12 months at $550 per week. Melbourne also saw a big uptick in unit prices over the 12 months, rising 22 per cent to $500 per week. Nipping at their heels was Perth, with 20 per cent growth (to sit at $480 per week).

SQM Research’s monthly median rent figures (opposed to Domain’s quarterly) reveal Sydney’s dominance in rent prices – with median weekly house rents at $964 in July and unit rents at $660. This compares with a capital city average median of $759 per week for houses and $584 per units. Canberra’s weekly median house rent was $774 in July and $557 for units.

Outside of the collective capitals, which individual suburbs are home to the highest rents?

CoreLogic’s Quarterly Rental Review Q2 2023 identified the 30 most expensive suburbs to rent in each capital. The top five in each capital were all houses:

• Sydney – Vaucluse ($2,692 pw); Rose Bay ($2,270 pw); Bellevue Hill ($2,180 pw); Balgowlah Heights ($2,026 pw); and Clontarf ($2,020 pw).
• Melbourne – Brighton ($1,343 pw); Black Rock ($1,245 pw); Middle Park ($1,225 pw); Malvern ($1,199 pw); and Canterbury ($1,174 pw).
• Perth – Dalkeith ($1,329 pw); Swanbourne ($1,255 pw); Cottesloe ($1,242 pw); City Beach ($1,234 pw); and Mount Claremont ($1,217 pw).
• Brisbane – Hamilton ($1,218 pw); Ascot ($1,156 pw); Hawthorne ($1,155 pw); Bulimba ($1,132 pw); and New Farm ($1,109 pw).
• Canberra – Griffith ($1,129 pw); Campbell ($940 pw); Denman Prospect ($882 pw); Garran ($856 pw); and Wright ($847 pw).
• Adelaide – Malvern ($872 pw); St Georges ($830 pw); Beaumont ($821 pw); Glenunga ($820 pw); and Glenelg East ($819 pw).
• Darwin – Parap ($855 pw); Lyons ($821 pw); Muirhead ($777 pw); Stuart Park ($757 pw); and Nightcliff ($735 pw).
• Hobart – Tranmere ($703 pw); Sandy Bay ($678 pw); North Hobart ($643 pw); West Hobart ($633 pw); and Lenah Valley ($622 pw).

Sydney also dominates when it comes to luxury rents. Sydney’s prime rents rose 11.7 per cent in the 12 months to the end of March 2023 and 5.3 per cent over the first quarter of 2023 – taking the harbour city from sixth to third place on Knight Frank’s Prime Global Rental Index. Sydney now sits behind Singapore and London on the index, which ranks 10 major cities worldwide according to growth in the high-end rental market.

Speaking of prestige property, Smart Property Investment identified the 50 most prestigious suburbs for property investment. Topping the list was Queensland’s Clayfield ($1.8 million), and New South Wales’ Leppington ($1.167 million), Hamilton ($1.1 million) and Oran Park ($1.081 million). These four suburbs, along with Western Australia’s Hamersley, were also identified as boasting the highest rents.

A word about landlord insurance and prestige property

Landlords with high-value rental properties should check the conditions of cover in their policy. Most insurance companies will set a maximum rent that is covered in respect to loss of rent claims. At EBM RentCover, it is $1,500 per week.

If the value of the rent charged exceeds the maximum covered, the policyholder should get in touch with their insurer to talk about cover options.

Looking for landlord insurance? Chat to a member of our Expert Care team about protecting your investment property.

*While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you need us we are here, contact 1800 661 662 if you have any questions.