The RBA’s November rate hike had a negative impact on consumer confidence in 2010, new research has found.
According to Australian property Monitor’s Rental Report, below-trend rental growth was recorded in the latter part of 2010, reflecting the general retraction of consumer confidence evident in property markets and the wider economy.
Although strong demand and competition remains for rental properties in most markets, landlords have been unable to convert this into significant rental increases.
National house rentals rose by just 1 per cent with 3 per cent total growth recorded for 2010. National unit rentals fell marginally by 0.2 per cent in December compared to September, and were 3.2 per cent higher than those recorded for December 2009.
The capital city markets of Sydney, Adelaide and Darwin recorded flat growth in house rentals in the December quarter, with Melbourne and Perth growing slightly by just over 1 per cent.
Brisbane, Canberra and Hobart however recorded stronger levels of quarterly house rental growth with Hobart bucking the national trend with a strong six-monthly rise of 6.7 per cent in house rentals.
While overall rental growth was not as strong as expected, APM’s senior economist Andrew Wilson said a reactivation of significant price growth by mid-year 2011 combined with solid rental growth should continue to produce stable yield outcomes for investors.
“However the prospect of continued subdued price growth in Melbourne and Brisbane may provide investors with opportunities for increased gross investment yields, particularly in the unit market,” he said.