With the Australian property market overall facing a downturn, what’s the fate of the rental market? Property data firm CoreLogic recorded a rise in rental rates across Australia, but at a slower pace than last year.
According to the firm’s recent Quarterly Rental Review, rental rates saw a .3% growth over the second quarter of 2018 and an overall 1.8 % increase over the 12 months to June 2018. Last month, rent figures remained level across the country.
While numbers climbed in most of the capital cities in the second quarter, rents in Darwin and Sydney were down by 1%, and .3%, respectively. These two were the only cities to fall in median rent level last month.
The report also highlighted a general slowdown in the rate of rental growth, although CoreLogic emphasised that this is normal for the second quarter.
“The first two quarters of 2018 have seen softer rental growth than the same two quarters of last year highlighting the slowing rental growth across the nation. With rental stock continuing to rise as off-the-plan unit settlements continue, it is anticipated that the softening rental growth will continue over the coming months,” CoreLogic Research Analyst Cameron Kusher said.
Rental growth over the second quarter in combined regions (.4%) was slightly higher than that for combined capital cities (.3%).
In terms of rental rates, all capital cities save Perth and Darwin – down .2% and 1.7%, respectively – saw an increase. Leading the highest growth in rental rate last year was Hobart, with a 10.7% increase. In second was Canberra, which spiked by 4.5%.
Meanwhile, the rental review also indicated a positive outlook for the rental yields. According to the Corelogic data, they have increased by .6% over the past 12 months to 3.7% nationwide, and the average rental yield was 3.4 % across the combined capitals, up .1%.
For specific capital cities, annual rental yields were higher in Sydney (+.1%), Darwin (+.3%) and Canberra (+.1%). Yields remained unchanged in Adelaide, Brisbane and Melbourne, and decreased slightly in Hobart (-.2%) and Perth (-0.1 %).
Notably, Darwin has both the highest growth in rental yields (+0.3%), as well as the highest yield (+5.7%).
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