Rents are rising across Australia but at a slower pace than they were 12 months ago, according to the latest Quarterly Rental Review by CoreLogic.
The June 2018 report tracks the median rental price of dwellings across Australian capital cities and regions over the second quarter of the year, and measures the percentage change in rental prices on a monthly, quarterly and annual basis. It also tracks rental yields across the combined capitals and regional housing markets.
Data from the June 2018 Quarterly Rental Review highlights a general slowdown in the rate of rental growth. This trend is typical of the second quarter, which historically records a slower period for rental growth and appreciation than the seasonally strong first three months of the year. The report also indicates rising rental yields across the combined capitals.
CoreLogic research analyst Cameron Kusher said, softer rental growth than the same two quarters of last year highlighting the slowing rental growth across the nation. With rental stock continuing to rise as off-the-plan unit settlements continue, it is anticipated that the softening rental growth will continue over the coming.
Key findings - rents
- Across the nation, rents remained unchanged for the month of June. However, they were 0.3 per cent higher over the second quarter of 2018 and 1.8 per cent higher over the 12 months to June 2018. The growth in rental prices is less than half what it was over the same period in 2017, when rents climbed by 0.7 per cent.
- Rental growth over the second quarter is slightly higher in the combined regions (+0.4 per cent) than in the combined capital cities (+0.3 per cent). Over the past 12 months, regional rents climbed 3.1 per cent compared to 1.4 per cent growth across the capitals.
- In the second quarter, rents climbed in all capital cities except for Darwin (-1.0 per cent) and Sydney (0.3 per cent). Darwin (-0.6 per cent) and Sydney (-0.2 per cent) were also the only capitals to experience a fall in median rent in June. Hobart reported the highest quarterly rental increase (+1.9 per cent), followed by Canberra (+1.3 per cent).
- Hobart was the standout performer across all the capitals over the past 12 months, reporting the highest growth in rental rates (+10.7 per cent). Canberra was the next strongest performer (+4.5 per cent). Rents climbed higher in all capital cities except Perth (-0.2 per cent) and Darwin (-1.7 per cent).
- Over the past 10 years, national weekly rents for both houses and units have increased by 25.7 per cent. House rents increased by 1.9 per cent over the past 12 months, while units increased by 1.7 per cent. This compares to a 0.2 per cent increase in national house rents over the June quarter, and a 0.5 per cent increase in unit rents.
- The national median rent is $429 per week ($427 for houses and $434 for units). Across the capital cities, the average median rental is $462 per week. The median house rental in the capital cities is $464 compared to $458 for units. Across the regions, both houses and units averaged $356 per week.
- $583. Despite its significant rental growth, Hobart has one of the lowest average rents across all the capitals at $418 per week. This makes it third only to Perth ($377) and Adelaide ($375) which has the cheapest weekly rent out of all Australian capital cities.
Key findings - rental yields
- Rental yields have increased nationally by 0.6 per cent over the past 12 months to 3.7 per cent. The average rental yield is 3.4 per cent across the combined capitals (+0.1 per cent). In comparison, yields across the combined regions fell slightly (-0.1 per cent) to 4.9 per cent.
- Annual rental yields increased in Sydney (+0.1 per cent), Darwin (+0.3 per cent) and Canberra (+0.1 per cent). Yields remained static
- Darwin has both the highest growth in rental yields (+0.3 per cent) as well as the highest yield (+5.7 per cent). Hobart has the second highest yield (+4.9 per cent) followed by Canberra (+4.6 per cent). Melbourne (+3.0 per cent) has the lowest rental yields, followed by Sydney (+3.2 per cent).