Moreover, the annual rate of change continued to cool, hitting a new historic low of 0.5%.
Combined capital city house rents hit $487 per week in September, while unit rents posted $462 per week. Based on the figures, rental costs remain significantly lower than the actual purchase cost of a house relative to a unit.
Meanwhile, dwelling rental rates for the combined capital cities are recorded at $483 per week, with a 0.3% increase over the first three quarters of the year. This is a 0.5% increase from last year’s figures.
However, individual figures for each city vary wildly as shown below.
Capital City Change in Rents
|Region||Current||Month||Quarter||YoY||Current||12 Months Ago|
“The data points to an ongoing softening of rental growth. The 0.5% rental rates rise over the past year is the slowest rate of rental growth on record based on data which goes back as far as December 1995,” said Cameron Kusher, research analyst for CoreLogic RP Data.
“The major factors contributing to slower rental growth are the construction boom across the capital cities coupled with slowing population growth, along with low mortgage rates and the heightened level of activity from investors.”
Overall, Sydney, Melbourne, and Brisbane experienced the largest boost in new housing supply and investor activity over the past few years. Although they continued to post rental rises over the past year, the pace of rental rates has begun to slow down.
“It is clear that 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 added.
Over the past year, Sydney and Melbourne recorded the biggest increases in weekly rents. Their rates of growth, however, have reduced compared to last year.
During the previous month, weekly rents dropped across ever capital city except Sydney (which remained unchanged), and Melbourne and Hobart (both of which saw an increase). Over three months, rents dropped among all capital cities.
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