The release today of the monthly CoreLogic RP Data Rent Review results for February confirm that over the coming months rental rates could begin to fall on an annual basis due to additional new rental supply entering the market.
According to research analyst Cameron Kusher, “With construction activity set to peak over the next 24 months, and with many new properties still to settle, there is a real possibility that rental rates will fall over the coming months.
“Based on our expectations, landlords have little scope to lift rental rates while for renters, it potentially means more surety in securing accommodation and the potential to upgrade into a higher level of accommodation for a similar cost.”
“The cause of this current slowdown in rental growth is falling wages, excess rental supply in certain areas and lower rates of population growth and population mobility impacting on demand for rental accommodation,”
Mr Kusher said.
- Capital city rental rates continue to record no change over the year.
- Weekly rents across the combined capital city measure increased 0.3% in February however rents were unchanged over the past 12 months.
- Rental rates have increased over the year in Sydney (+1.5%), Melbourne (+2.2%) and Canberra (+1.6%) and are unchanged in Hobart.
- Rents have fallen over the year in Brisbane (-0.7%), Adelaide (-0.4%), Perth (-8.4%) and Darwin (-13.3%).
- Currently, combined capital city rental rates are $488/week for houses and $467/week for units.
- CoreLogic RP Data analysis shows rents across the combined capitals rose by 0.3% in February 2016. Rental rates increased over the month in all capital cities except for Perth and Darwin.
- Dwelling rental rates across the combined capital cities have not moved and continue to sit at now $485 per week for the past year; at the same time last year rental rates had increased by 1.7% highlighting that the slowdown in rental conditions has been quite sharp over the year.
- Rental rates in Brisbane, Adelaide, Perth and Darwin are currently experiencing some of their largest annual falls on record.
- All capital cities are experiencing annual rental changes which are well below their decade average levels.