Australian landlords have been warned to expect a fall in rents during 2016, as the effects of low wage growth, slow population growth and the construction boom are all felt.
According to the latest CoreLogic RP Data Rental Review report, Australia’s combined capital city weekly rental rate was $485 in February after recording no growth over the previous 12 months.
In the 12 months to February 2015, rents across Australia grew by 1.7%.
“With construction activity set to peak over the next 24 months, and with many new properties still to settle, there is a real possibility that rental rates will fall over the coming months,” CoreLogic RP Data research analyst Cameron Kusher said.
“Based on our expectations, landlords have little scope to lift rental rates while for renters, it potentially means more surety in securing accommodation and the potential to upgrade into a higher level of accommodation for a similar cost,” Kusher said.
“The cause of this current slowdown in rental growth is falling wages, excess rental supply in certain areas and lower rates of population growth and population mobility impacting on demand for rental accommodation,” he said.
House rents have already seen a decline, currently sitting 0.3% lower than they were 12 months ago, while unit rents are up 1.2%
While there was no movement nationally for rents over the 12 months to February, conditions across the individual markets were varied.
Melbourne has seen the strongest growth in the past year, with rents up 2.2%, while in Canberra and Sydney they have risen by 1.6% and 1.5% respectively.
On the other side of the coin, Perth
have both seen record falls, with rents declining 8.4% and 13.3% respectively.
Rents are also down in Adelaide
over the year by 0.4% and in Brisbane by 0.7%.
Rents have remained unchanged in Hobart.
Source: CoreLogic RP Data
The stall in rental growth has also pushed yields down, gross rental yields were recorded at 3.4% for houses in February 2016 and at 4.3% for units, both of which are record lows.
Rental yields are lowest for houses in Melbourne (2.9%) and highest in Darwin (5.2%). Unit yields are lowest in Melbourne at 4.0% and highest in both Brisbane and Hobart at 5.3%.
Melbourne house yields are currently at record low levels while Melbourne unit yields are also at historic low levels
Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker
Top Suburbs :
Get help with your investment property
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus and appointment is free.
We value your privacy and treat all your information seriously - you can check out