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Yields down across all capital cities

10 June 2016 Reporter

Rental yields are continuing to fall to record lows across the country, according to new figures.

Rental yields are continuing to fall to record lows across the country, according to new figures.

A new report from CoreLogic has highlighted that the national average for rental yields increased by just 0.7 per cent over the first five months of 2016.

Darwin recorded the greatest losses in rental yields over the 12 months to May 2016, as houses dropped from 5.6 per cent to 4.9 per cent, while units fell from 5.8 per cent to 4.5 per cent.

In Sydney, houses fell from 3.4 per cent to 3.0 per cent while units dropped from 4.5 per cent to 4.0 per cent.

Melbourne’s houses decreased from 3.2 per cent to 2.9 per cent and units fell from 4.3 per cent to 4.1 per cent.

In Brisbane, houses dropped from 4.5 per cent to 4.2 per cent while units fell from 5.4 per cent to 5.2 per cent.

Adelaide’s houses rose from 4.2 per cent to 4.7 per cent and units dropped from 4.9 per cent to 4.7 per cent.

In Perth, houses dropped from 4.0 per cent to 3.8 per cent while units fell from 4.8 per cent to 4.6 per cent.

Hobart’s houses decreased from 5.4 per cent to 5.3 per cent and units fell from 5.7 per cent to 5.5 per cent.

In Canberra, houses decreased from 4.2 per cent to 3.9 per cent and units rose from 5.0 per cent to 5.4 per cent.

Across the capital cities, houses fell from 3.6 per cent to 3.3 per cent while units decreased from 4.6 per cent to 4.2 per cent.

CoreLogic head of research Tim Lawless said the effect of strong capital gains with little rental movement is a further compression of gross rental yields.

“While the annual pace of growth has clearly reversed direction on the latest few months of data, the trend is still relatively fresh and may be short-lived,” he said.

“Despite lower mortgage rates in May, lending conditions are tighter now than they were a year ago. Recent data from APRA highlights that interest-only lending is now at its lowest level since March 2013 and new mortgages with an LVR [loan-to-value ratio] higher than 90 per cent are at the lowest reading since March 2011.”

[Related: Rental yields pushed to record lows]

 

Yields down across all capital cities
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