While Perth property prices have risen over the past year, rents have continued to slump, says new data.
According to CoreLogic RP Data, Perth’s rents have fallen by 3.1 per cent over the past year, while property prices have increased by 3.4 per cent.
CoreLogic senior research analyst Cameron Kusher said rental yields are recorded at 4.1 per cent, their lowest level since January 2012.
National capital city rental rate growth is at its slowest in more than a decade.
“The rate of rental growth is easing on the back of a large rise in capital city home values and a strong rise in the supply of new homes being built,” Mr Kusher said.
“In addition, there’s a record level of investor buying, which is adding more supply to the rental market.”
“At a combined capital city level across all dwellings, gross rental yields are recorded at 3.8 per cent, which is the lowest reading since January 2011.
“With the rate of capital gains outpacing rental growth, we are seeing rental returns reduce,” he added.
Mr Kusher said over the past year, gross rental yields have fallen across each capital city.
He said with a bigger supply of new housing and low interest rates likely to drive further price rises, rental growth would remain subdued over the coming year.
“We may see the rate of rental growth slow further as renters begin to see more accommodation options being built,” he said.
“With such tepid growth in rents and such a high level of investment activity, it is clear that most investors are buying residential property with a view to capital growth, rather than rental returns.”