Are you about to renegotiate your next rental agreement, or looking for a new property to rent? You may be in luck. On the back of increased rental availability, lower levels of migration and subdued inflationary pressures, growth in rents has just hit the lowest level on record.
According to the latest CoreLogic RP Data rental index weekly rents grew by just 0.3% in the nine months to September, leaving the annual rate of growth at 0.5%, the slowest annual increase recorded since at least December 1995.
Rents for houses rose by just 0.3%, outpaced by a 1.5% lift for units. The remarkable charts below reveals the steep deceleration in rental growth since the global financial crisis.
“The major factors contributing to slower rental growth are the construction boom across the capital cities coupled with slowing population growth, along with low mortgage rates and the heightened level of activity from investors,” said Cameron Kusher, research analyst at CoreLogic RP Data.
Across the country the average weighted weekly rent stood at $483. Sydney, at $592 per week, had the highest average rent, although the annual rate of growth slowed to just 1.9%. Melbourne and Brisbane, the second and third largest capital cities, recorded average rents of $448 and $430 respectively, some 2.1% and 0.5% higher than the levels of a year earlier.
The table below details change in rental rates across the country, along with yields which have been impacted by increased property prices.
Although incredibly benign already, Kusher believes growth in rents could slow even further in the months ahead.
“We envisage that growth in rental rates could slow even further over the coming months,” he said.
“In fact there is the possibility that rental rates will start to fall on an annual basis over the coming months if the current downwards trend persists as expected. The large pipeline of residential construction activity as well as high levels of investment demand means people choosing to rent continue to have more accommodation choices and landlords have limited scope to increase rents.”
While it may be a seller’s market for those looking to purchase property, clearly its a tenant’s market when it comes to the rental market.