Rental growth is slowing in Australia, with yields stable
Rents are rising across Australia but at a slower pace than they were 12 months ago, up 0.3% quarter on quarter and 1.8% over the 12 months to June 2018.
The latest rental tracker report from real estate firm CoreLogic also shows that rental yields are stable across the key cities covered by the index, rising slightly in some locations.
According to research analyst Cameron Kusher 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.
However, the growth in rental prices is less than half what it was over the same period in 2017, when rents climbed by 0.7% but growth is stronger in the regions, up 3.1% over the 12 months.
Overall rents climbed in all capital cities except for Darwin with a fall of 1% and Sydney down 0.3% while month on month they were down 0.6% and 0.2% respectively. The highest quarterly growth was 1.9% in Hobart and 1.3% in Canberra.
Hobart was the standout performer across all the capitals over the last 12 months, with a rise of 10.7%, followed by Canberra up 4.5%, while rents fell year on year by 0.2% in Perth and by 1.7% in Darwin.
Over the past 10 years, national weekly rents have increased by 25.7%, with house rents up 1.9% in the last 12 months and apartment rents up 1.7%. This compares to a 0.2% increase in national house rents over the June quarter and a 0.5% rise for apartments.
The index also shows that the national median rent is $429 per week and 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 apartments. Across the regions, both houses and apartment rents averaged $356 per week.
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 at $377 and Adelaide at $375, the cheapest weekly rent out of all Australian capital cities.
Rental yields have increased nationally by 0.6% over the last 12 months to 3.7%. The average rental yield is 3.4% across the combined capitals, a rise of 0.1%. In comparison, yields across the combined regions fell slightly by 0.1% to 4.9%.
Annual rental yields increased in Sydney by 0.1%, by 0.3% in Darwin and by 0.1% in Canberra. Darwin has the highest yield at 5.7%, followed Hobart at 4.9% and Canberra at 4.6%. Melbourne has the lowest rental yields at 3%, followed by Sydney at 3.2%.