Investors who own units are getting nearly as much rent per week as those who own houses.
The RP Data June quarter Rent Report shows the rental rate for a house has increased by seven per cent over the past five years, but the rental rate for units has increased by 7.9 per cent.
The median rent for a unit in Sydney is now $450 a week, compared to the median rent for a house at $460. In other words, unit owners are earning pretty much the same as those with houses.
The same applies in other cities. The median rent for a unit in Melbourne is just $10 less than for a house, and in Brisbane it's just $5 less for a unit than a house.
RP Data's Cameron Kusher says despite the quarterly slowdown in rental growth, the lack of first homebuyers and limited supply of new housing is increasing competition.
"The result reflects changing lifestyle patterns and the ongoing densification of inner-city areas and subsequent increasing demand for rental units in these regions," Kusher says.
"This activity may be beneficial to investors who could see a boost in rental rates as vacancies tighten and fewer new dwellings continue to commence construction.
"Combined capital cities rents increased by 2.7 per cent over the year, which is below the inflationary figures to March 2011. Nationally, rental growth has actually been slightly higher over the year, with rents increasing by 2.9 per cent, which is likely a result of the most recent quarterly results."
Darwin is now Australia's most expensive city to rent a property, with the median advertised rent at $520 per quarter. Canberra was the second most expensive capital city ($500 per week), followed by Sydney ($460 per week).
Alternatively, Adelaide and Hobart are the cheapest cities for rental properties ($330 per week) and rents are also affordable in Melbourne ($360 per week) and Brisbane ($370 per week).
When it comes to units, however, Sydney leads the way ($450 per week), followed by Canberra ($430 per week).
Kusher says rents are likely to continue to grow in the short term. Sales volumes are depressed and first homebuyers are inactive, which means there could be more competition for rental stock.
"Limited new development during 2011 is likely to add to the upwards pressure on capital city rental rates and as a result, we expect rental growth to revert to around five-year average levels, with inner-city units and outer more affordable housing stock having the strongest prospect for rental growth," Kusher says.