Residential rents in Australian capital cities up 0.1% month on month
Residential rents across Australian capital cities were virtually unchanged in October, down by 0.1% over the previous month, according to the latest index data.
Rents were lower in four of the eight capital cities covered by the CoreLogic RP Data rental review report and the annual rate of change increased slightly from 0.5% in September to 0.6% in October.
There is an ongoing softening in the rental market, according to CoreLogic research analyst Cameron Kusher, who said that with just two months remaining to the end of the year it seems that rental growth will be very soft over 2015 as a whole.
‘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,’ he explained.
He pointed out that Sydney, Melbourne and Brisbane have continued to record rental rises over the last year however, each city is seeing a slowing in the pace of rental growth relative to 12 months ago.
'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,’ Kusher said.
A breakdown of the data shows that rental rates were $483 per week and they have increased by just 0.2% over the first 10 months of the year while they have risen by 0.6% over the past 12 months.
Only Sydney and Melbourne have recorded rental increases greater than 2% over the year.
Rents have fallen over the year in Perth and Darwin, while the remaining capitals have seen rents rise by less than 2% over the year.
It is anticipated that the rate of rental growth will continue to slow over the coming months due to increased supply of housing and rental stock and slower migration rates.
Looking across the individual capital cities, over the past year, Sydney and Melbourne have recorded the greatest increases in weekly rents. Over the past month, weekly rents have moved lower across every capital city except Sydney, Hobart and Canberra where they rose and in Melbourne where they were unchanged. Over the past three months rents are lower in all capital cities except for Sydney and Melbourne.