What’s happening in the rental markets around Australia?
We know our housing markets are on the move, but that rental markets are very fragmented according to CoreLogics latest quarterly rental market update.
Here’s what they found:
- National rents were -0.1% lower over the month to September 2019, and down -0.3% on a quarterly basis, however 0.7% higher over the year.
- Capital city rents are -0.5% lower over the quarter and 0.1% higher year-on-year while regional market rents are 0.3% higher over the quarter to be 2.3% higher over the past 12 months.
- Adelaide was the only capital city to record a month on month rise in rents in September 2019, with rents lower monthly across the remaining capital cities, apart from Brisbane where rents were steady.
- In September 2019, Hobart became more expensive to rent a property than Melbourne, with a current median rental value of $464/week (the third highest median rent amongst the capitals, after Sydney ($571/week) and Canberra ($538/week).
- Across the individual capital cities, annual rental growth was positive across all cities except Sydney (-2.2%) and Darwin (-2.7%).
- Gross rental yields are currently recorded at 3.99% nationally compared to 4.14% at the end of the previous quarter and 3.85% a year ago.
- Gross rental yields remain higher relative to the same time last year across all of the individual capital cities, apart from Sydney and Canberra where yields are level relative to last year.
Rental markets remain sluggish, with national rents down -0.1% over the month of September; the third consecutive month of falls.
National rents were -0.1% lower over the month to September 2019, with a median rental value of $436/week.
Nationally, rents have continued to trend lower over each of the last three months after the June results saw rents unchanged over the month.
Looking at the change in rents over the month across the capital cities, Adelaide was the only capital city to record a monthly rise in rents (+0.1%), with rental rates lower in Sydney (-0.3%), Melbourne (-0.1%), Perth (-0.1%), Hobart (-0.2%), Darwin (-0.2%) and Canberra (-0.3%), while unchanged in Brisbane.
Sydney remains the most expensive city in which to rent with a median rental value in September 2019 of $571/week, however this is lower than one year ago when median rents across Sydney sat at $592/week.
Median rents across Canberra came in only $33 lower than Sydney, at $538/week, making it the second most expensive market to rent in across the nation.
Hobart has quickly become one of the more expensive rental markets with rents rising rapidly over recent years across the city.
In September 2019, Hobart became more expensive to rent a property than Melbourne, with a current median rental value of $464/week; $7/week higher than Melbourne’s median rents.
With value growth on the rise again, yields are starting to trend lower
National dwelling values are back on the rise, after bottoming out in June 2019 they have since risen by 1.7%, taking national gross rental yields lower in September 19.
Nationally, gross rental yields were recorded at 3.99% at the end of September 2019, compared to the 4.14% over the previous June quarter, although higher than the September quarter of 2018 (3.85%).
Across the combined capital cities, gross rental yields are recorded at 3.71% compared to 3.87% the previous quarter and 3.58% a year earlier.
Gross rental yields across the combined regional markets came in at 5.10% in September 19, down from 5.14% the previous quarter, however higher than the 4.95% a year earlier.
Gross rental yields across the individual capital cities at the end of September 2019 were recorded at 3.25% in Sydney, 3.50% in Melbourne, 4.60% in Brisbane, 4.50% in Adelaide, 4.34% in Perth, 5.17% in Hobart, 5.96% in Darwin and 4.70% in Canberra.
Adelaide was the only capital city to record higher yields over the September quarter relative to the previous June quarter.
On a yearly basis, yields are currently higher across all markets compared to the same quarter in 2018, apart from Sydney and Canberra where yields are level with the same time last year.
Given the recent rapid recovery of dwelling values across the two largest capital cities of Sydney and Melbourne, it is unsurprising that these two cities have seen yields compress the most over the quarter.
In June 2019, Sydney recorded a gross rental yield of 3.47%, with yields in September 2019 now similar to one year ago (3.23%).
Melbourne recorded a gross rental yield of 3.69% in the June quarter, while this is lower over the quarter, on a yearly basis yields currently remain higher (3.31%).
Key rental and yield statistics
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