Rental growth is weak outside of Australian capital cities, new data shows
Residential rental market conditions outside of capital cities in Australia remained weak over the September 2015 quarter with prices falling or remaining flat.
Weekly rents fell the most in regional Western Australia with a decrease of 2.6, they were down 2.1% in the Northern Territory and down 1.7% in Victoria. The remaining capital cities all recorded flat condition over the three months ending September 2015.
Regional unit markets also showed weak rental conditions, with regional Tasmania the only area recording an increase in apartment rents over the quarter with growth of 2.2%. Unit rents were down over the quarter in regional Western Australia by 2.9%, in New South Wales by 1.5% and the remaining capital cities all showed flat rental conditions.
According to CoreLogic RP Data head of research Tim Lawless there has been a significant slowdown in the rate of rental growth over the past couple of years due to new housing supply increasing and investor purchasing at record highs. He expects this trend to continue over the coming year.
Annually, rents rose across some of the regional rental markets, however, Lawless noted that the performance as a whole remains relatively weak. Tasmania recorded the strongest rental growth across the country with a 2% increase for houses and 4.5% for units.
He pointed out that on the other hand, the most substantial fall in rental rates, relative to September last year, were across regional Northern Territory where house rents are down 6% year on year and units down 6.5%.
‘Those regions with strong ties to the mining and resources sector are pulling regional rental lower as demand for housing continues to moderate. On the other hand, regional lifestyle and coastal markets are bucking the softening trend to some extent with showing year on year rises,’ Lawless concluded.