Released yesterday, CoreLogic RP Data’s December Rent Review has shown that residential rents in Australia have grown by only 0.3% during the 2015 calendar year, which is the slowest rate of growth on record.
At the same time in 2014, Australia’s rental growth was recorded at 1.8%.
According to the research, the average combined capital city rent for house is $486 per week and $464 per week for a unit.
During 2015, Melbourne saw the highest rate of rental growth at 2.2%, followed by Sydney and Canberra at 1.9% and Hobart at 0.6%.
Darwin was home to 2015’s biggest falls in residential rents, with a decrease of 13.3% over the year, followed by Perth’s decrease of 8%.
Rents also went backwards in Brisbane by 0.3% and Adelaide by 0.2%.
Source: CoreLogic RP Data
Cameron Kusher, research analyst at CoreLogic RP Data, said the slow rate of rental growth should be something that investors get used to.
“We’ve never seen rental growth as sluggish as it is at the moment,” Kusher said.
“Furthermore, we’re expecting to see more of the same over the coming months due to increases in the supply of new housing, rental stock and a further slowdown in migration rates,” he said.
Kusher said the increase in supply gives landlords little opportunity to increase rents and there could be even more bad news for investors as they could be hit by further falls in rental growth.
“We envisage that growth in rental rates is likely to remain weak or potentially slow even further over the coming months. In fact there is the possibility that rental rates will start to fall on an annual basis,” he said.
“While this is great news for renters, investors are facing the prospect of weaker capital gain coupled with little in the way of rental growth or yield.”