Despite house prices remaining resilient, we know our rental markets have taken a beating due to Covid-19.
Realestate.com.au reports that for the first time on record the cost of renting in Australia has fallen.
The results are a clear indicator of how COVID-19 has changed the dynamic of the property market.
Over the June quarter headline inflation fell by -1.9 per cent – the first quarterly fall since the December 2008 quarter and the largest quarterly fall on record.
The cost of renting is taken into account when measuring CPI and over the quarter, national rents fell by -1.3 per cent which was both the largest and first quarterly decline on record.
Rental rates are coming under pressure form multiple sources: we have virtually no migration and overseas arrivals into the country, there is new stimulus that is encouraging purchasing from first home buyers who otherwise may have been renters and then there’s the fact that unemployment is rising and younger people are most affected.
While growth in rents had been slowing and was unchanged over the December 2019 quarter, the fall was unprecedented.
Nationally, the cost of renting is now back at levels last recorded in March 2017.
Breaking the data down by capital cities reveals that rents having fallen over the quarter in
- Sydney (-2.0%),
- Melbourne (-1.1%),
- Darwin (-1.9%),
- Brisbane and Perth (both -0.7%)
- Canberra (-0.2%).
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Despite the falling rents throughout the last quarter, the volume of rental searches on realestate.com.au is actually up 38.5 per cent over the quarter.
Although rental demand has eased over recent weeks it is currently 53.3 per cent higher than it was this time last year, highlighting much stronger levels of interaction with the available rental listings according to realestate.com
Rental demand steadied last week on the portal after falling for five weeks consecutive weeks, but the demand was fragmeneted.
Rental demand fell last week in Victoria (-0.2%), Western Australia (-2.1%), Tasmania (-2.0%) and Australian Capital Territory (-0.8%) with News South Wales (0.6%) and Northern Territory (0.7%) recording the largest increases.
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