- The cost to rent a home in Australia rose marginally in the year to March.
- Median capital city rental costs actually went backwards, driven largely by a decline in Sydney and further slowdown in Melbourne.
- Rents in regional areas rose by 1.8% over the year in average weighted terms.
- With national home prices going backwards, the modest increase in rents saw gross rental yields lift to 4.1% at the end of the March quarter.
It’s getting more expensive to rent a home in Australia, according to CoreLogic’s latest Quarterly Rental Review.
In the year to March the median weekly rent rose by 0.4% to $436, reflecting increases in all capital city markets except for Sydney and Darwin.
Median capital city rents actually fell by 0.1% over the year, largely reflecting a decline in Sydney, Australia’s largest and most expensive rental market.
“The annual change in combined capital city rents is the lowest on record based on data which is available back to 2005,” CoreLogic said.
Helping to explain the modest national increase over the same period, median rents in regional areas rose by 1.8% to $378 per week.
“Annual growth in regional rents has started to accelerate from historic lows,” CoreLogic said.
This table from CoreLogic shows the movement in median weekly rents across capital city markets and regional areas over the past month, quarter and year, along with the median weekly rental cost at the end of the March quarter.
Rather than indicating a sharp acceleration in rental rates in early 2019, CoreLogic said the 1% quarterly increase reflects that rent rises are typically the strongest at this time of year.
The largest annual increase of any capital city market was seen in Hobart where weekly median rents jumped by 5.4% to $385. The Tasmanian capital was followed by Canberra where median rents rose by 3.6% to $550. Melbourne and Perth also saw rents increase by 2.1% to $454 and $385 respectively from a year earlier.
While Sydney retained the title as the most expensive capital city market to rent at $582, median weekly rents actually fell by 3.1% over the year.
“It is clear that Sydney accounts for a large share of overall renters with annual falls in Sydney leading to a fall in the combined capital city index,” CoreLogic said.
“The past year has seen a change of direction for both the Brisbane and Perth rental markets, following a number of years of declines rents are now climbing again.
“Elsewhere rental rates are continuing to rise however, the rate of growth has slowed compared to a year ago.”
CoreLogic put the decline in median weekly rents in Sydney over the past year, and slowdown in Melbourne, down to previous strength in property investment, along with a strong lift in new housing supply, in both cities in recent years.
“Sydney and Melbourne are seeing the impact of such significant demand from investors over recent years along with a substantial ramp-up in new housing supply, much of which was purchased by investors,” the group said.
With median home prices falling in many parts of the over the past year, led by Sydney and Melbourne, the modest increase in weekly rents saw gross rental yields lift to 4.1%, up from 3.8% at the end of the March quarter last year.
“Gross rental yields have increased over the past quarter across all capital cities while over the past year they are higher in all cities except Hobart,” CoreLogic said.
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