Buoyant property market conditions do not always mean that all sectors of the property market are performing well according to quarterly rental data released today by CoreLogic RP Data.
With new housing supply increasing and investor purchasing at record highs we have seen a significant slowdown in the rate of rental growth over the past couple of years and we expect this trend to continue over the coming year.
Today’s CoreLogic RP Data Quarterly Rental Review results are showing that over the first quarter of 2015, national house and unit rental rates increased by just 1.3 per cent while advertised weekly house and unit rents have risen 1.2 per cent at a combined capital city level over the three months to the end of March 2015.
Given the softer conditions recorded across the capital city rental market towards the end of 2014, rental growth over the first quarter of 2015 has been relatively strong at a capital city level.
- Advertised rents rose by 1.2 per cent for both houses and units, with house rents recorded at $435 and unit rents at $415 per week.
- Nationally, advertised rents for both houses and units rising by 1.3 per cent over the three months to March 2015,
- Typical house rent is up to $400 per week and $390 per week for units.
For houses, across the individual capital cities:
- Melbourne (1.3 per cent), Canberra (1.1 per cent) and Sydney (1.0 per cent) were the strongest performers, each recording a rise in rents over the quarter, while Darwin (-1.6 per cent) was the only capital city detached housing market to record a fall in rents over the March quarter. The remaining four cities saw rents remain stable over the three month period.
- Darwin, Australia’s most expensive capital city unit market, was the only capital city to see rents fall over the March 2015 quarter by -5.5 per cent which equates to a $10 decrease bringing the weekly rate down to $630.
- Melbourne (2.8 per cent) and Canberra (2.6 per cent) were the strongest performers for the March 2015 quarter.
2015 compared to 2014 – what changed?
On an annual basis, when compared to March 2014, national house rents are 2.6 per cent higher at $400 per week, while unit rents are 1.3 per cent higher over the year, currently sitting at $390 per week.
Across the combined capital cities, the performance has been more restrained, with house and unit rents up 1.2 per cent to $435 per week and $415 per week respectively.
Across the individual capital city detached housing markets, advertised rental rates have increased by as much as 6.1 per cent in the smaller Hobart market and have fallen by as much as -5.3 per cent across Perth, where overall housing market conditions have been somewhat weak recently.
Annual rental growth was more moderate across most other markets, with Darwin (-3.1 per cent) the only other city to see rents fall over the year, while Canberra house rents recorded no movement over the year.
While Hobart recorded the strongest rental growth for houses, the Hobart unit rental market has seen rents remain steady and the same can be said for both Brisbane and Adelaide.
Sydney (2.0 per cent) and Melbourne (1.4 per cent) were the only unit markets to record a rise in rents over the year.
Given the current levels of investor activity across the unit markets is not surprising that many of the individual capital cities have recorded a lower amount of rental growth across the unit market when compared to detached houses.