I'm busy working on my blog posts. Watch this space!
Annual capital city rental change in decline and now lowest since 1996
April 11, 2016
Weekly rents increased by a mere 0.2% at a combined capital city level in March. Despite the monthly increase in rents, rental rates across the combined capital cities are -0.2% lower over the past year.
Over the year, Melbourne recorded the biggest increase in rental rates at 2.0 per cent followed by Sydney at 1.4 per cent, Canberra 1.2 per cent and Hobart 0.3 per cent. On the flipside, the cities to see a drop in rents included Darwin -11.5%, Perth -8.4 per cent, Adelaide -1.0%, and Brisbane with a -0.7% drop.
In its March Rental Review out today, CoreLogic RP Data analysts confirmed that the combined capital city house rents were recorded at $489 per week in March 2016 while unit rents were $469 per week. Over the past month, house rents have increased by 0.1% and unit rents by 0.4% and over the past three months, house rents rose 0.5% compared to a 0.9% rise in unit rents.
The March results show that recent rental increases are likely to be seasonal which is further highlighted by the fact rents are lower over the year. Over the past 12 months, house rents were -0.5% lower and unit rents increased by 1.5%. Research analyst Cameron Kusher said, “It is important to note that a much higher proportion of total unit stock is rented compared to housing stock.”
“We have been tracking the annual change in capital city rents since 1996 and this is the first time we have seen rental rates falling.”
“The extra accommodation supply, as a result of the current building boom, along with the recent record high levels of investment purchasing is adding substantial new dwelling supply to the rental market at a time when the rate of population growth is slowing from quarter to quarter. Furthermore, wages are increasing at their slowest annual pace.”
“Today’s results also highlight a swift easing in rental market conditions over the past year. We’ve attributed this ease to a variety of influences such as falling real wages, excess rental supply in certain areas and lower rates of population growth which have impacted on demand for rental accommodation.”
“With dwelling approvals recently at record highs, construction activity set to peak over the next 24 months and many new properties still to settle, the rental demand weakness is expected to persist. In all probability, there won’t be much scope for landlords to lift rental rates given current conditions have given greater negotiation opportunities to those in rental situation.”
While rental rates remain at record highs in Sydney and Melbourne, rents are lower than their previous peaks in all remaining capital cities. The decline in dwelling rents from peaks are recorded at: -0.9% in Brisbane, -1.2% in Adelaide, -12.8% in Perth, -0.1% in Hobart, -15.6% in Darwin and -7.4% in Canberra.
Download the full March Rental report - Click here
CoreLogic Australia is a wholly owned subsidiary of CoreLogic (NYSE: CLGX), which is the largest property data and analytics company in the world. CoreLogic provides property information, analytics and services across Australia, New Zealand and Asia, and recently expanded its service offering through the purchase of project activity and building cost information provider Cordell. With Australia’s most comprehensive property databases, the company’s combined data offering is derived from public, contributory and proprietary sources and includes over 500 million decision points spanning over three decades of collection, providing detailed coverage of property and other encumbrances such as tenancy, location, hazard risk and related performance information.
With over 20,000 customers and 150,000 end users, CoreLogic is the leading provider of property data, analytics and related services to consumers, investors, real estate, mortgage, finance, banking, building services, insurance, developers, wealth management and government. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and geo spatial services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. CoreLogic employs over 650 people across Australia and in New Zealand. For more information call 1300 734 318 or visit www.corelogic.com.au
In compiling this publication, RP Data Pty Ltd trading as CoreLogic has relied upon information supplied by a number of external sources. CoreLogic does not warrant its accuracy or completeness and to the full extent allowed by law excludes liability in contract, tort or otherwise, for any loss or damage sustained by subscribers, or by any other person or body corporate arising from or in connection with the supply or use of the whole or any part of the information in this publication through any cause whatsoever and limits any liability it may have to the amount paid to CoreLogic for the supply of such information.