According to data released by Corelogic, tenants in Sydney, Melbourne, Brisbane, Canberra, Darwin and Hobart are now paying less for a property than they were three months ago.
CoreLogic’s head of research Australia, Eliza Owen, explained that nationally, rent values declined 0.3 per cent in the month of June, and 0.5 per cent over the quarter. This was the largest quarterly fall in rents since September 2018, and further falls are expected in the coming months.
“The COVID-19 environment shifted this trajectory. Closed international borders created a significant shock to rental demand, as historically the majority of new migrants to Australia have been renters,” said Ms Owen
“Furthermore, job losses in sectors such as hospitality, tourism and the arts, which ABS payroll data estimates has been around 20 per cent, have also impacted demand, because households in these sectors are more likely to rent than in other industries.”
The data revealed that Hobart renters have had the greatest fall, with median rents falling from $470 to $454.
Australia’s two largest cities also saw falls, with Sydney falling to $568 over the June quarter, down from $574 in the March quarter, while Melbourne renters are paying $5 less, with rents from $458 to $453.
Brisbane, Darwin and Canberran renters are now also paying slightly less than they were three months earlier.
Ms Owen highlights that the rental market wasn’t particularly strong leading into the crisis.
“The decline in rent values over the quarter came at a time when the rental market was already relatively weak. Annualised growth in national rent values was just 1.1 per cent in the five years to June 2020, compared with annualised growth in the selected living cost index of 1.4 per cent in the five years to March for employee households.
“In other words, rents have generally seen softer growth than the growth in general cost of living for most households,” she concluded.
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