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Gross rental yields across the combined capital cities continue to trend lower as the rate of home value growth outpaces rental growth.
According to the spring 2014 Australian Residential Development Outlook by the Property Council of Australia, over the 12 months to July 2014, capital city rental rates have increased by 2.0 per cent for houses and 3.1 per cent for units.
These figures are well below the five-year average annual rates increase of 4.0 per cent for house and 3.8 per cent for units, the report said.
As sales volumes have increased and dwelling construction rises, it is clear rental pressures in the market are lessening.
Across the individual cities, Sydney has recorded the strongest annual rate of rental growth, and Perth and Canberra are experiencing falls in rental rates.
The other aspect in the slowing of rental growth is the impact on rental yields, the report said.
Twelve months ago capital city growth rental yields were recorded at 4.2 per cent for houses and 4.9 per cent for units.
Gross rental yields have eased over the year to 3.8 per cent for houses and 4.6 per cent for units.
Source: The Property Council of Australia
Source: The Property Council of Australia
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