- Rents declined 0.7% across the country’s capital cities during the June quarter, according to the latest CoreLogic data.
- Hobart, Sydney and Melbourne were responsible for the largest falls, plunging 2.3%, 1.3% and 1% respectively.
- Softening rental markets have largely been driven by a halt in migration leading to falling demand and increasing supply of available rentals.
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The property market is continuing down the trough coronavirus has created, with renters getting sweet relief at the expense of landlords.
The latest data from CoreLogic shows that rents nationwide saw their biggest fall in almost two years as markets roiled through the three months to June.
“Prior to the fall in rent values over the June quarter, growth in rents had seen some momentum building, with… consecutive increases between September 2019 and March 2020,” head of research Australia Eliza Owen said.
However, that all changed as the coronavirus arrived in Australia and the government moved to shut the country and close businesses.
“Closed international boarders created a significant shock to rental demand, as historically the majority of new migrants to Australia have been renters,” Owen said.
“Job losses in sectors such as hospitality, tourism and the arts, which ABS payroll data estimates has been around 20%, have also impacted demand, because households in these sectors are more likely to rent than in other industries.”
Decreased demand has ultimately helped increase supply. Short-term rentals have flooded back to the market to be shared amongst a shrinking pool of tenants at the same time that the nation’s economy braces for recession.
As a result, rents across the country’s capital cities fell 0.7%, while regional areas managed to cling on to 0.2% growth. Just as in the case of property prices, Hobart saw the sharpest short-term losses, as rents declined 2.3% in just three months.
Sydney was the second-worst hit with a 1.3% fall. On balance, it places the harbour city’s median asking rental price just $2 north of the Canberra market, which is falling at a far slower pace.
Melbourne, at the heart of Victoria’s second outbreak, has seen rents drop by an even 1%, while Perth and Adelaide managed to buck the trend, growing 0.9% and 0.1% respectively.
Still, all capital cities have either seen their rental prices stagnate or even grow over the last 12 months with the exception of Sydney and Darwin — both falling 1%.
It’s worth noting however softening rental markets still may have a way to fall, with borders expected to begin reopening on 1 January at the earliest.
What the market looks like in six months when some of those guarantees are due to expire is anybody’s guess.