Amid rising property values, rental growth has slumped to its lowest annual rate in more than a decade, according to a quarterly report.
The recent CoreLogic RP Data Rental Review confirmed that while property values continue to rise, rental growth is sitting at its lowest point in more than 10 years, with combined capital city rents increasing by just 1.8 per cent over the past 12 months.
CoreLogic RP Data said a surge in off-the-plan apartment approvals and sales recorded throughout 2014 will negatively impact asking rents in 2015.
In the last quarter of 2014, asking rents for houses were most affordable in Hobart at $343 a week, and $385 a week in Melbourne. Darwin rents were highest at $645 a week, despite falling just under one per cent for the year, followed by Sydney at $525 a week.
Darwin was also the most expensive capital city in which to rent a unit, with a $550 median weekly asking rent. Sydney’s weekly unit rent was $495 a week.
Melbourne’s median asking rent for units was $360, which was in line with the national median.
Canberra was the worst-performing capital for property investors, with rents down more than seven per cent. They also fell in Perth, by 4.4 per cent.
CoreLogic RP Data research analyst Cameron Kusher said rental growth was the most subdued it had been since the mid-2000s.
“While rental growth remains slow, rents still increased over the year in most capital cities with Perth, Darwin and Canberra the exceptions,” Mr Kusher said.
“Given the recent high numbers of dwelling approvals and commencements coupled with high levels of purchase activity from investors, we would anticipate that the rate of rental growth will remain soft throughout 2015.”