NEWS: Average cost of renting jumps $40 in a year

IT COSTS $50 more to rent a house now than it did a year ago, new figures show.

The average cost of renting a unit has jumped $40, according to research firm RP Data and it is still rising.

The average house rent rose from $300 in December 2007 to $350 in December 2008 while the average unit rent rose from $280 to $320.

The rises are great news for investors hoping to take advantage of record low interest rates and bad news for tenants.

RP Data's research analyst Cameron Kusher said the 17 per cent rise in house rents and 14 per cent rise in apartment rents coincided with price falls significantly boosting the yield new investors are able to get.

In a growing number of areas it is possible to buy a property where the rent exceeds the interest on the loan.

"The numbers show that quality inner city property will continue to witness strong long-term demand for both owner occupation and rental occupation,'' Mr Kusher said.

He said rents will continue to rise this year although not by as much as last year .

Vacancy rates remain close to a record low at 1.4 per cent, according to the Real Estate Institute of Victoria.

Source: Herald Sun