CoreLogic RP Data’s monthly rental review out today for the month of September confirmed rental rates across the combined capital cities were unchanged; however, rates fell in most individual capital cities.
- The annual rate of change continued to slow over the month and reached a new historic low of 0.5%
- Combined capital city house rents were recorded at $487 per week in September 2015 and unit rents were $462 per week. The gap in the rental cost remains significantly lower than the actual purchase cost of a house relative to a unit
- Over the past month, both house and unit rents across the combined capital cities were unchanged
Change in rents
CoreLogic RP Data research analyst Cameron Kusher noted that dwelling rental rates across the combined capital cities are recorded at $483 per week and have increased by just 0.3% over the first three quarters of the year and risen by 0.5% over the past 12 months.
“The September data points to an ongoing softening of rental growth.
“The 0.5% rise in rental rates over the past year is the slowest rate of rental growth on record based on data which goes back as far as December 1995.
“The major factors contributing to slower rental growth are the construction boom across the capital cities coupled with slowing population growth, low mortgage rates, and heightened activity levels from investors,” Mr Kusher said.
According to the results, the three cities to experience the largest ramp up in new housing supply and investor activity over recent years were Sydney, Melbourne and Brisbane. While each of these cities continued to record rental rates increases over the past year, Mr Kusher noted the pace of rental rates is starting to slow down.
“Clearly, the increase in investment stock is providing landlords with little scope to lift rental rates, while the low mortgage rate environment provides little incentive to push yields higher,” Mr Kusher said.
Across the individual capital cities, over the past twelve month, Sydney and Melbourne each recorded the greatest increases in weekly rents however, the rates of growth have slowed relative to one year ago.
Download the full September Rental Review - click here
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