Key takeaways
CoreLogic's national rental index shows the rate of rental growth has softened slightly, with rents up 0.8% in May compared to the 0.9% and 1% increases in April and March respectively. The unit sector is under the greatest pressure, with rents increasing at a faster rate than houses due to their relative affordability.
Two hundred twenty-five houses and 29 unit suburbs saw a decline in rent in the past year, with the majority located in Canberra and regional areas.
The softening rental conditions in the ACT are likely due to more stock on the market.
Melbourne rents rose 4% in May, Canberra rents fell -0.4% and Hobart rents fell -0.7% since the onset of COVID.
Almost 1,700 Australian house and unit suburbs have recorded a rental increase of 10% or more in the past year, despite the pace of rental growth showing signs of easing.
CoreLogic’s national rental index shows the rate of rental growth has softened slightly, with rents up 0.8% in May compared to the 0.9% and 1% increases in April and March respectively.
The slowdown in the monthly growth rate had contributed to a fall in the annual trend, which dipped below double digits for the first time in 10 months, with rents nationally increasing 9.9% over the 12 months to May.
This was largely being driven by a slowdown in regional markets, where rents increased 0.3% over the month, down from a record monthly growth rate of 1.2% in March 2022.
Regional rental growth has slowed dramatically from a year ago while capital city rents were up 1.0% in May
When you break that figure down further by property type, we can see the unit sector is under the greatest pressure, with rents increasing at a faster rate than houses due to their relative affordability.
Capital city house rents increased by 0.9% in May compared to a 1.4% lift for units.
CoreLogic’s digital Mapping the Market tool, which now includes rental metrics, showed 44.4% of house and unit markets recorded a rental increase of 10% or more in the year to May.
Of the 3,812 markets analysed, 6.7% recorded a decline in rents for the period.
Two hundred twenty-five houses and 29 unit suburbs had a decline in rent in the past year, the majority located in Canberra and regional areas.
Sydney had 38 markets where rents declined, with the majority located on the Central Coast.
In Melbourne, just four saw annual rental decreases, while houses in the north-east suburb of Ascot were Brisbane’s only market to see a fall in rents.
In the past year, we’ve seen rents increase in every capital and rest of the state region except for Canberra where there’s been a - 1.9% decline.
Canberra was previously the country’s most expensive rental city until Sydney overtook it in December.
The softening rental conditions in the ACT are likely due to there being more stock on the market.
Canberra’s vacancy rate increased from 0.7% in March 2022 to 2.2%, ranking it second behind Hobart (2.7%).
More stock means tenants have more choices and potentially more power when negotiating their rent.
Other rental insights
- The gap between median house and unit rents has narrowed to $60/week across the combined capitals and $36/week
- There were 4,409 additional new rental listings added to the market in May compared to April, nudging the total rental supply
- However, new rental listings remain -11.0% below the previous five-year average, and total rental listings remain - 3% below the long-term average.
- National vacancy rates increased from a record low of 1.1% in April to 2% in May.
- Hobart has the highest vacancy rate of 7%, followed by Canberra with 2.2%.
- All remaining capital cities are recording vacancy rates under 5%.
- Melbourne recorded the strongest month-on-month change in rents, rising 4% in May.
- Rents fell -0.4% in Canberra and -0.7% in Hobart.
- Since the onset of COVID, capital city rents have risen 25.7% and regional rental values have increased 29.2%, adding the equivalent of $125/week and $116/week to the respective median rent.
