CoreLogic December 2017 Quarterly Rental Review
Rental rates are increasing as yield flatten out.
▶ On a national basis, weekly rents increased by 0.1% in December 2017 to be 0.3% higher over the final quarter of 2017 and 2.7% higher over the 2017 calendar year.
▶ Capital city rents are -0.1% lower over the quarter and 2.9% higher year-on-year while regional market rents are 1.2% higher over the quarter to be 3.0% higher over the past 12 months.
▶ Across the capital cities, rents are lower over the past three months in Sydney, Brisbane, Perth and Darwin and higher elsewhere.
▶ Over the past 12 months, rents have increased in all capital cities except for Perth and Darwin with the rate of annual rental change higher over the past year than it was over the previous 12 months in each capital city except Canberra.
▶ Median weekly rents nationally are recorded at$420 for houses and $425 for units.
▶ Across the combined capital cities, house rents were recorded at $457/week and unit rents at$449/week while across the combined regional markets rents were $351/week for houses and$349/week for units.
Rental growth remains moderate but has lifted over the fourth quarter compared to the third.
Rental rates increased by 0.1% nationally in December 2017 with capital city rents unchanged and regional rents up 0.5%. The recent disparity between growth in rents in capital city and regional markets is mirroring what is being seen with dwelling values. At the end of 2017, weekly rents were recorded at $421 nationally, with figures of $455 across the combined capital cities and $350 across the combined regional markets.
Over the month, rental rates increased in Melbourne (+0.1%), Adelaide (+0.5%), Hobart (+0.9%) and Canberra (+0.9%), were unchanged in Brisbane and Perth and they fell in Sydney (-0.3%) and Darwin (-0.3%).
Taking a look at the current median rents, Sydney is substantially more expensive than all other capital cities for houses ($599/week) and units ($561/week). Historically Hobart has been the most affordable capital city in which to rent however, with strong rental growth over the past year it is now cheaper to rent in both Adelaide and Perth than it is to rent in Hobart.
Rental rates have been increasing across most capital cities and those in which rents have been falling the rate of decline has slowed. This does seem a little counterintuitive given the large volume of housing supply additions over recent years, heightened level of investor activity in the housing market and consistent trend of low household income growth.
In Sydney and Melbourne in particular, supply additions have been significant over recent years as has demand for housing from investors, but affordability remains stretched and population growth remains substantial which is creating competition for rental stock as new households moving to these cities look for accommodation and lower income households remain locked out of home ownership, instead having to rent. Canberra and Hobart are seeing growing housing demand with relatively low levels of housing stock additions over recent years. In Brisbane and Adelaide rents are increasing albeit at a moderate pace while in Perth and Darwin rents have continued to fall over the past year, albeit at a reduced rate of decline.
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