Rents in capitals remain static in October

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Rents among the combined capitals were more or less unchanged for October, according to a rental review conducted by CoreLogic RP Data.

The average figure was down by -0.1% over the month, with rents slightly lower in four capital cities.

The annual rate of change has increased slightly from 0.5% in September to 0.6% in October.

“The data points to an ongoing softening of rental growth, particularly throughout this year. With just two months remaining to year’s end, it seems that rental growth will be very soft over 2015,” said Cameron Kusher, CoreLogic RP Data research analyst.

Kusher noted that the slowing rental growth is the result of a number of factors, namely the construction boom among the capital cities, the slowing population growth of the nation, low mortgage rates, and the recent increased level of activity from investors.

“Sydney, Melbourne and Brisbane continued to record rental rises over the past year however, each city is seeing a slowing in the pace of rental growth relative to 12 months ago.

Clearly, the increase in investment stock is providing landlords with little scope to lift rental rates while the low mortgage rate environment provides little incentive to push yields higher,” Kusher explained.

The review discovered that dwelling rates across the combined capital cities were recorded at $483 weekly, having increased by just 0.2% over the first ten months of the year and 0.6% more over the past 12 months.

The review also noted that only Sydney and Melbourne posted rental increases greater than 2% over the year.

Both Perth and Darwin, according to the review, saw their rents fall over the year, while the other capitals experienced increases by less than 2% in the same time.

Current combined capital city rates are at $487 a week for houses and $463 a week for units.

There are expectations that the rate of rental growth will continue to cool down over the coming months as a result of the increased supply of housing and rental stock, as well as slower migration rates.



 

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