Rental rates remain sluggish across all capital cities
According to the latest Rental Review report from CoreLogic RP Data, the combined capital cities across Australia saw a rental rate increase of just 0.1% for April – the slowest annual pace in over a decade, according to research analyst Cameron Kusher.
However, across Australia the capital cities that saw rental falls include Perth, Darwin and Canberra who saw rents drop by -4.2%, -4.7% and -2.6% retrospectively.
Currently, the weekly rent across Australia is $487, which rose by 0.1% over April, 0.7% over the quarter and 1.7% year on year.
Interestingly, the annual rental growth for the country has remained at 1.7%, and this was last seen in June 2003. Rental yields however have fallen from last year from 3.9% to 3.7% for the combined capital cities.
Sydney still remains the most expensive capital city to rent, with the current rent sitting at $594, which has increased by 0.2% over the month, 1.0% over the quarter and 3.3% year on year. Melbourne has also seen a 0.2% increase over April with rents sitting at $446 a week and has increased by 0.9% over the quarter and 2.3% over the year.
In Brisbane, the weekly rent is now $435, an increase of 0.1% since last month, up by 0.4% on the quarter and 1.9% since last year.
If we look year on year, then Sydney and Hobart are the two capital cities that recorded the greatest rental increase of 3.3% and 3.2%, whilst Darwin and Perth have seen the greatest rental decrease of -4.7% and -4.2% retrospectively.
When comparing units with houses, then over the past year units have recorded slightly stronger rental growth than houses of 1.9% compared to 1.6%. However, when looking over the past 10 years then the current rate of rental growth is slow-moving across all capital cities and the annual ten year average rental growth is higher.
The reason for the slowdown of rental rate increases is likely due to the booming level of construction alongside high levels of buying activity, particular from investors in Sydney, Melbourne and Brisbane, although Sydney is seeing a slowdown in construction.
If construction continues to increase, then rental rates are sure to slow down even more over the upcoming months.
Published on 26th of May 2015 by Marty Stanowich