Rent falls hit property investors in Brisbane Perth, Darwin
In great news for renters, but a bind for property investors, a new report shows Australia's capital cities have posted the lowest rate of annual rental growth in records going back two decades.
- Capital city rents rose 0.3 per cent over 2015, slowest annual pace in at least two decades
- Perth rents fell 8 per cent and Darwin 13.3 per cent last year
- The average capital city rent (houses and units) was $483 per week
According to CoreLogic RP Data's Rent Review report, weekly rents were unchanged in December, while rental growth nationally was a feeble 0.3 per cent over 2015.
Combined capital city average rental rates were $486 a week for houses and $464 a week for units.
Sydney, Melbourne, Hobart and Canberra all saw a modest increase in weekly rental rates, while rents fell in Brisbane, Adelaide, Perth and Darwin.
Sydney and Melbourne posted the highest growth, rising 1.9 per cent and 2.2 per cent respectively.
While the two major cities posted an increase, rental growth is slowing relative to twelve months earlier.
"You only have to drive around the inner-city areas of Sydney, Melbourne or Brisbane to know that there's a huge amount of unit construction activity going on," CoreLogic RP Data research analyst Cameron Kusher told ABC News.
"Now units are twice as likely to be rented as houses, so much of that stock does end up back in the rental pool.
"But the reason why yields have gone so low is the fact that capital growth, particularly in Sydney and Melbourne, has been so much stronger than rental growth, and that's pushed those rental returns down."
For the first time in a long time they [tenants] can negotiate a little bit and maybe even get rent for less than what they're paying at the moment.Cameron Kusher, CoreLogic RP Data
Renters in Darwin and Perth have reaped the biggest benefits, with rents there falling by 13.3 per cent and 8 per cent respectively over the past year.
"Perth is still approving a lot of new housing for construction as well, so that's going to continue to weaken the market," Mr Kusher said.
"In Darwin a lot of people are just leaving the Northern Territory at the moment because the job prospects are not as strong there."
In further bad news for many heavily indebted landlords, CoreLogic said it expected rental growth to slow further before it starts to improve.
"Obviously that's not great news for people who own investment properties but, for renters, it means they've got a lot of choice out there in the market," Mr Kusher said.
"For the first time in a long time they can negotiate a little bit and maybe even get rent for less than what they're paying at the moment."
Source: ABC News