Invest
Rents grow at fastest pace since 2007
Housing rents are rising at the fastest pace since 2007, but experts are warning that rental conditions around the country are extremely diverse.
Rents grow at fastest pace since 2007
Housing rents are rising at the fastest pace since 2007, but experts are warning that rental conditions around the country are extremely diverse.
National rental rates have surged 3.2 per cent in the March quarter, representing the largest quarterly increase since May 2007, with the regions, Darwin and Perth driving much of the growth, CoreLogic’s new quarterly rental review revealed.
Unsurprisingly, the combined regional markets saw a stronger lift in rents than the capital cities, recording growth of 4.1 per cent in the first quarter compared with a combined increase of 2.9 per cent in the cities.
But what is surprising is that regional units recorded the highest quarterly rental growth of 4.8 per cent compared with a 4.0 per cent hike in house rents, despite a growing preference for larger spaces. In the cities the figures were on par with trends, with unit rents up 2.0 per cent compared with houses, which gained 3.3 per cent in the three months to March.
But while housing rents are rising at the fastest pace since 2007, the headline reading hides the sheer diversity of rental conditions around the country, CoreLogic research director Tim Lawless cautioned.
“At one end of the spectrum, we have Perth and Darwin where annual rental growth is well into double digits and accelerating. At the other end is Melbourne and Sydney where rents are down over the year,” Mr Lawless said.
In fact, houses and units in Darwin showed the strongest growth in rental rates over the quarter, up 8.2 per cent and 7.0 per cent, respectively. In Perth, quarterly growth stood at 5.9 per cent for houses and 6.0 per cent for units.
In Australia’s two largest cities, Sydney and Melbourne, growth stalled as closed international borders exasperated a demand shock already challenged by high supply.
Melbourne unit rents dropped 8.2 per cent over the year, while Sydney unit rents contracted 4.9 per cent.
“Some inner-city precincts of Melbourne have seen unit rents fall by more than 20 per cent over the past 12 months,” Mr Lawless said.
The expert noted that prospects for a material improvement in rental conditions across these inner-city high-density precincts are largely dependent on a return of tenancy demand from international students and visitors.
Canberra, on the other hand, was not only the most expensive market to rent a house across the capital cities, but also the most expensive capital city unit rental market in the quarter at $513 per week.
But Mr Lawless pointed to another discrepancy, noting that although rents are generally rising, housing values have been rising at a faster rate, which has seen rental yields compress across most of the capital cities.
“The exceptions are Perth and Darwin where rents have risen at a faster pace than housing values, driving a rise in yields. The opposite is true in Sydney and Melbourne where rental yields are plumbing new record lows.
“Outside of Sydney and Melbourne, with mortgage rates so low, yields are generally high enough to provide investors with positive cash flow opportunities from the outset,” Mr Lawless concluded.
About the author
About the author
Property
How Labor plans to fix the housing affordability crisis
Opposition Leader Anthony Albanese has proposed the creation of a new $10 billion Housing Australia Future Fund to tackle the housing affordability and homelessness crises. ...Read more
Property
How to buy house and land packages in Australia
If you’re planning to buy a house and land package, it can be tricky if you’re not familiar with the ins and outs of such deals. Here’s our guide to make this purchase easier for you. ...Read more
Property
How first home buyers can take advantage of the budget
While the 2021 budget included a number of measures relevant to property investors, an expert has questioned whether any of them could yield an impact on rising buyer imbalances and reduced liveabilit...Read more
Property
First home buyers at the frontline of Frydenberg’s charm offensive
There are few surprises to be found in this year’s federal budget, with Australian property investors and first home buyers set to benefit from new and expanded measures. ...Read more
Property
May could be the beginning of the end for housing pricing boom
Experts have suggested that recent growth in prices could mark the peak of the pandemic bounceback for the housing market. ...Read more
Property
Treasurer announces home loan assistance packages for single parents
The federal government has announced a new scheme targeted at helping single parents with limited deposits into the housing market. ...Read more
Property
Australian housing market now valued at $8 trillion
The Australian dwelling market has reached a new record high, with the total value of residential real estate breaking the $8 trillion mark for the first time. ...Read more
Property
A generation of Aussies could be locked out of the housing market as prices boom
A booming property market is set to see a generation of younger Australians priced out of the market, a shadow assistant minister has said, challenging the narrative that younger people are failing...Read more
Has the property market reached its peak; Biden’s climate summit and our sharemarket, and the upcoming budget
Listen now
Is the market overheating; should ETFs take your fancy, and what’s happening to the low and middle income tax offset?
Listen now
Home values up 30% (or are they); NFTs taking the world by storm, and why Keating thinks Aussies will be ‘poor’ in retirement
Listen now
Raging floods, the tech stock bubble and the ongoing SG debate
Listen now
Property
How Labor plans to fix the housing affordability crisis
Opposition Leader Anthony Albanese has proposed the creation of a new $10 billion Housing Australia Future Fund to tackle the housing affordability and homelessness crises. ...Read more
Property
How to buy house and land packages in Australia
If you’re planning to buy a house and land package, it can be tricky if you’re not familiar with the ins and outs of such deals. Here’s our guide to make this purchase easier for you. ...Read more
Property
How first home buyers can take advantage of the budget
While the 2021 budget included a number of measures relevant to property investors, an expert has questioned whether any of them could yield an impact on rising buyer imbalances and reduced liveabilit...Read more
Property
First home buyers at the frontline of Frydenberg’s charm offensive
There are few surprises to be found in this year’s federal budget, with Australian property investors and first home buyers set to benefit from new and expanded measures. ...Read more
Property
May could be the beginning of the end for housing pricing boom
Experts have suggested that recent growth in prices could mark the peak of the pandemic bounceback for the housing market. ...Read more
Property
Treasurer announces home loan assistance packages for single parents
The federal government has announced a new scheme targeted at helping single parents with limited deposits into the housing market. ...Read more
Property
Australian housing market now valued at $8 trillion
The Australian dwelling market has reached a new record high, with the total value of residential real estate breaking the $8 trillion mark for the first time. ...Read more
Property
A generation of Aussies could be locked out of the housing market as prices boom
A booming property market is set to see a generation of younger Australians priced out of the market, a shadow assistant minister has said, challenging the narrative that younger people are failing...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
