This article is from the Australian Property Journal archive
RENTAL growth has remained flat across most capital cities in the September quarter, according to Australian Property Monitors’ Rental Price Series Quarterly Report.
Nationally, rents declined slightly by 0.3% for houses and 0.5% for units, bringing the annual level of growth for houses to 2.8%, below the long-term average growth rate of 6.8%.
Although units performed better, reaching 4.8% annually however was well below the long-term average of 7.3%.
APM head of research Yvonne Chan said the softening of the rental market can be attributed to the large number of first home buyers, who were drawn from the rental market by historically low interest rates and the First Home Owner Boost.
“Although first home buyer numbers have returned to normal, we are still seeing a delayed flow on effect on rental demand.
“In addition, a fall in consumer sentiment in September and continued concerns over the global economy means landlords have continued to be conservative in raising rents, compared to the first quarter of this year,” she added.
The declines in rents for houses in Melbourne and South East Queensland were offset by solid increases in Adelaide, Hobart and Darwin, with rents in other cities holding steady. The slight decline in rents for units nationally was due to Melbourne, Perth and Darwin. However, Sydney rents remained unchanged for both houses and units after experiencing strong growth in the previous quarter.
Hobart was also the only capital city to achieve growth for units, at 4.2%.
Sydney rents remained unchanged in both houses and units after experiencing strong growth in the previous quarter. Despite the flat result, the city remains the most expensive place to rent a unit in the country at $440, and is the second most expensive for houses.
Canberra is catching up, recording the third highest asking rents out of the capital cities, for both houses ($450) and units ($410).
Melbourne house rents declined 1.4% to $360, whilst Brisbane was flat at $360. Melbourne unit rents also fell 1.4% to $345, Darwin fell 4.4% to $430 and Perth declined 2.8% to $350.
Chan said despite a flat rental market, the outlook for rents is still one of growth.
“Demand and supply pressures remain as population growth continues. Tight vacancy rates, together with a strong economic outlook will lead more of the population into the rental market and inevitably higher rents.
“However, there are still affordable areas to rent in each capital city, where prices are below the asking median weekly rent,” she concluded.
Australian Property Journal
