IN good news for tenants, renting is now a whole lot cheaper according the CoreLogic RP Data’s August rent review.
CoreLogic research analyst Cameron Kusher said excluding Melbourne, Darwin and Canberra, rental rates across Australia’s combined capital cities continued to drop in August.
“Interestingly, the August results mirrored the results for July, with both months now sharing a -0.3 per cent drop,” he said.
Mr Kusher said weaker rental market conditions are expected to continue over the coming months as overall housing supply grows.
According to the data, combined capital city median weekly rents are sitting at $481 per week; the lowest rate since November 2014.
Mr Kusher said over the past year rental rates have fallen by -0.5 per cent and are now -1.4 per cent lower than when they peaked back in May 2015.
“In contrast, we saw capital city rental rates increase by 0.7 per cent at this time last year,” he said.
“As long as wages growth continues to stagnate, coupled with historically high levels of new dwelling construction and slowing population growth, landlords won’t have much scope to increase rents. On the flipside, renters are now in a much better position to negotiate.”
Changing rental market conditions may also spur on repercussions for older stock, particularly units. With new unit supply being built, much of which is located in inner city locations.
According to Cameron Kusher, there is the potential for a flight of tenant demand towards higher quality tenancy options in newer buildings.
“It may be more difficult for owners of older units with fewer amenities to compete with better located and facilitated new unit stock, particularly if there is little pricing differential,” he said.
Over the past 12 months, rental rates have increased in Melbourne (+2.9 per cent), Hobart (+6.8 per cent) and Canberra (+2.6 per cent). Rental rates are unchanged over the year in Sydney and have fallen in Brisbane (-1.1 per cent), Adelaide (-0.3 per cent), Perth (-9.4 per cent) and Darwin (-14.1 per cent). Melbourne, Hobart and Canberra have each recorded stronger rental growth over the past year compared to the previous year.
August Rent Review Snapshot:
Weekly rents across the combined capital cities fell by -0.3 per cent in August 2016 and are now -0.5 per cent lower over the past year;
Melbourne (2.4 per cent), Hobart (6.8 per cent) and Canberra (2.6 per cent) are the only cities in which rental rates have increased over the past year while Sydney rents are unchanged;
Large rental falls in Perth (-9.4 per cent) and Darwin (-14.1 per cent) have pulled the combined capital average lower, with rents also falling in Brisbane (-1.1 per cent) and Adelaide (-0.3 per cent) over the year;
Currently, combined capital city rental rates are $484/week for houses and $466/week for units.
