Weekly rents are on the rise across the country, driven by stronger regional performances, new CoreLogic data has revealed.
The first CoreLogic Quarterly Rental Review for 2019, which tracks median rents and rental yields across Australia, shows that national rents have risen by 1 per cent during the first three months of the year.
Research analyst for CoreLogic Cameron Kusher said that trend change is evident.
“This seasonally strong first quarter has delivered the highest increase in weekly rents since the corresponding first quarter a year ago,” he said.
“Our regional housing markets are performing marginally better than the capital cities, many of which have been experiencing weaker rental market conditions in recent years due to excess housing supply and growing investor activity.
“Quarterly rents have increased across all capital cities, bar Sydney and Darwin. Hobart is experiencing notable growth, with rents increasing by 3.6 per cent over the past quarter. However, with a median rent of $582 per week, Sydney remains Australia’s most expensive city for tenants by far.”
Mr Kusher said the review also points to national yield increases.
“Gross rental yields for the first quarter are 4.10 per cent compared to 3.95 per cent in the previous quarter and 3.77 per cent a year ago.
“Darwin has the highest rental yield across the country, with an annual median of 6 per cent.”
He said that national rents are up by 1 per cent over the March quarter and 0.4 of a percentage point over the past 12 months.
“Combined capital city rents were 0.9 [of a percentage point] higher than the December 2018 quarter but are 0.1 [of a percentage point] lower than the previous March quarter,” Mr Kusher said.
“This is the lowest annual change since CoreLogic started tracking rents in 2005.”
He said that regional rents were slightly stronger, with a 1.1 per cent increase over the quarter and a 1.8 per cent increase over the year.
Mr Kusher said that, in the first quarter, rents climbed in all capital cities except for Darwin, where they fell by 0.3 of a percentage point.
He said that Hobart was by far the strongest performer, with a 3.6 per cent increase in rent over the past quarter, followed by Perth, at 1.8 per cent, and Canberra at 1.5 per cent.
Hobart also experienced the highest annual rent increase, at 5.4 per cent. Darwin performed the poorest, falling to 5.7 per cent.
“Nationally, the median rent is $436 per week. The median rent across the capital cities is $465 per week, and $378 per week across the regionals.
“Gross rental yields have increased from 3.8 per cent to 4.1 per cent nationally. Across the combined capitals, the average rental yield is 3.8 per cent, up from 3.5 per cent. Regional yields are far higher at 5.1 per cent, up from 4.9 per cent 12 months ago.”
Mr Kusher said that Sydney remains Australia’s most expensive capital city rental market.
“With a median weekly rent of $582, despite a decline of 3.1 per cent over the past 12 months,” he added.
“While rents in Sydney remained the same as the previous month, they increased by 0.5 [of a percentage point] over the past quarter. Sydney also has the lowest rental yields out of all capital cities, at 3.5 per cent over the past quarter.”
Mr Kusher said that Canberra is one of only two capital cities, alongside Darwin, to experience a drop in weekly rent over the past month, of 0.1 of a percentage point.
Mr Kusher said that rents in Melbourne are $454 a week.
“An increase of 1 per cent over the quarter and 2.1 per cent over the past 12 months.
“Melbourne also reported the greatest increase in rental yields out of all capital cities, with current rental yields being 3.6 per cent, compared to 3.1 per cent a year ago. Despite the rise in yields, Melbourne has the second-lowest weekly rental yield out of all capital cities, after Sydney.”
He said that, in Brisbane, rents are starting to climb again, while Perth and Adelaide are the most affordable capital cities, with median weekly rent of $385 and $386, respectively.
“Hobart reported the strongest growth in rents, up by 3.6 per cent over the past quarter to $453 per week,” Mr Kusher said.
“Darwin has experienced the most significant decline in rent to achieve a median weekly rent of $458. This is down by 0.3 [of a percentage point] over the quarter and 5.7 per cent over the past year.”