The Australian Property Investor magazine revealed today the top 100 suburbs in Australia with the fastest growing rents.

API has identified the top 50 locations for rental growth for both houses and units, measured by changes in median advertised rents based on data from Australian Property Monitors.

“Most investors think primarily about capital growth when it comes to property, but it’s also important to think about rental growth because it can help reduce the financial burden and help you hold a property for the long term,” says API deputy editor Vanessa De Groot.

“Rental growth wasn’t huge through 2009 and 2010 because high first homebuyer activity took a lot of renters out of the market, but that’s set to turn around in 2011.

“To help investors find those areas where the fastest rental growth is occurring, API has put together a list of the top 100 suburbs with the fastest growing rents over 2010.”

Of all the states, it was New South Wales that stood out from the crowd in the list of the top 100 locations for rental growth, with the state accounting for more than half of the suburbs.

All of the top 100 rental growth suburbs in API’s list experienced growth in rents well above the annual growth seen across Australia over the course of 2010 – the top 50 for houses recorded growth of more than 15.4 per cent, while the top 50 for units all recorded growth of no less than 13.6 per cent.

The top five suburbs for rental growth in houses were:
1. Lithgow, NSW – 38.6 per cent
2. Cape Woolamai, Vic – 35.2 per cent
3. Sadadeen, NT – 33.6 per cent
4. Balgowlah Heights, NSW – 31.7 per cent
5. East Perth, WA – 28.9 per cent

The top five suburbs for rental growth in units were:
1. Fremantle, WA – 31.3 per cent
2. Muswellbrook, NSW – 29.4 per cent
3. Tamarama, NSW – 28.2 per cent
4. Campbelltown, NSW – 27.3 per cent
5. Belmont, NSW – 26.5 per cent

The list comes as rental growth is set to be the biggest feature of the residential property market this year with growth in property values set to take a backseat over 2011.