Ensure you never miss an issue of the
real estate business bulletin
Rental rates remain submerged

Rental rates remain submerged

by Tim Neary 0 comments

Rental rates showed no signs of lifting last month and are lower still for the 12-month period to July 2016, as the high levels of housing supply begin to take effect. 

The CoreLogic July Rent Index fell by -0.3 per cent in July to be -0.6 per cent lower over the 12 months to July 2016.

Combined capital city median weekly rents is currently $483, the lowest since December 2015. In contrast, this time last year, capital city rental rates had increased by 0.9 per cent.

Combined, capital city rental rates are $485 per week for houses and $467 per week for units.

CoreLogic research analyst Cameron Kusher said several factors are forcing rental rates down.

These factors include the softest wages growth on record, relatively high levels of housing investment following record highs recently, historically high levels of new dwelling construction – most of which are units which are more than twice as likely to be rented – and the slowing of population growth.

Mr Kusher said the combination of these factors means landlords have little scope to increase rental rates, adding that the current rental market conditions will have a flow-on effect for older stock.

“Particularly units, given we’re seeing so much new unit supply being added to the rental market, much of which is located in inner city locations.” 

Mr Kusher said the current rental market weakness is expected to persist, and gross rental yields will remain at record low levels.

In July, rental rates dropped in all cities except for Melbourne and Hobart.

Over the past 12 months, rental rates have increased in Sydney (+0.4 per cent), Melbourne (+2.0 per cent), Hobart (+6.2 per cent) and Canberra (+1.9 per cent). It has fallen in Brisbane (-1.0 per cent), Adelaide (-0.5 per cent), Perth (-9.2 per cent) and Darwin (-15.7 per cent).

Hobart and Canberra are the only capital cities to have recorded an increase in year-on-year rental growth.

[Related: Rental rates plummet in capital cities]

Rental rates remain submerged
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
An industry where the resilient succeeds

Tim Heavyside believes that a strong support team and good foundations are paramount to success in the real estate industry, and with regu...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?