2015 was a lackluster year for rental growth in Australia with rents increasing by just 0.3%; not exactly the news investors are looking to read about but good news for those looking to rent according to CoreLogic RP Data research analyst Cameron Kusher.
“We’ve never seen rental growth as sluggish as it is at the moment. Furthermore, we’re expecting to see more of the same over the coming months due to increases in the supply of new housing, rental stock and a further slowdown in migration rates.
“The only cities to see an increase in weekly rental rates were Sydney with an increase of 1.9%, Melbourne (2.2%), Hobart (0.6%) and Canberra (1.9%) while rates fell in Brisbane by (-0.3%), Adelaide (-0.2%), Perth (-8.0%) and Darwin (-13.3%),” Mr Kusher said.
- Combined capital city rental rates are $486/week for houses and $464/week for units
- Dwelling rental rates across the combined capital cities are recorded at $483 per week and they have increased by just 0.3% over the past 12 months which is a record low rate of annual growth (result based on records back to December 1996).
A comparison between December 2015 and December 2014 shows in 2014 annual rental growth was slowing but was tracking at a much higher 1.8% which highlights just how much the rental market eased throughout 2015.
Mr Kusher said, “The construction boom across the capital cities, coupled with slowing population growth, low mortgage rates and the recent heightened level of activity from investors are the major contributing factors to the slowing rental growth in 2015.”
“Although Sydney and Melbourne saw the largest ramp up in new housing supply, both cities still recorded rental increases over the year, although rental growth is slowing relative to 12 months earlier.”
“It is clear that the increase in investment stock continues to provide landlords with little scope to lift rental rates while the low mortgage rate environment provides little incentive to push yields higher.”
“We envisage that growth in rental rates is likely to remain weak or potentially slow even further over the coming months. The good news for those looking to rent is the possibility that rental rates will fall even further over the coming year.”
“While the news for renters will be welcomed, investors may be facing weaker capital gains coupled with little in the way of rental growth or yield.”
“The large pipeline of residential construction activity and recent high levels of investment demand means that renters are likely to continue to have plenty of choice,” Mr Kusher said.
Download the full December Rental Review - Click here
Contact CoreLogic RP Data Customer Care on 1300 734 318 and speak to Lyndall Blake. Mitch Koper is on annual leave & on mobile for any urgent inquiries.
CoreLogic RP Data is a wholly owned subsidiary of CoreLogic (NYSE: CLGX),which is the largest property data and analytics company in the world. CoreLogic RP Data provides property information, analytics and services across Australia and New Zealand and is currently developing and growing partnerships throughout Asia. 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 11,000 customers and 120,000 end users, CoreLogic RP Data is the leading provider of property data, analytics and related services to consumers, investors, real estate, mortgage, finance, banking, insurance, developers, wealth management and government. CoreLogic RP Data delivers value to clients through unique data, analytics, workflow technology, advisory and geo spatial services. Clients rely on CoreLogic RP Data to help identify and manage growth opportunities, improve performance and mitigate risk. CoreLogic RP Data employs over 480 people at nine locations 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.