According to the CoreLogic Rental Index, combined capital city rental rates were unchanged in May 2016.Melbourne and Hobart were the only cities to record rental rises with falls elsewhere.
While annual rents fell by -0.3%, weekly rents across the combined capital cities were unchanged in May 2016. Currently, combined capital city rental rates are $489/week for houses and $469/week for units.
Commenting in the May CoreLogic Rent Review, research analyst Cameron Kusher said, “It is anticipated that the weakness in the rental market will persist and where on an annual basis, we’ll see rents fall further over coming months.”
“However over the 12 months to May, we did see several capital cities experience a rise in rents. These included, Sydney at 0.9%, Melbourne 2.3%, Hobart 3.7% and Canberra 0.1%. On the flipside, falling rents pulled the combined capital average lower with a drop in Perth of -8.8% and for Darwin, -16.9%. Brisbane rents at -0.9% and Adelaide -0.9%, were also lower over the year,” Mr Kusher said.
Median weekly rents are currently sitting at $486 across the combined capital cities. Combined capital city rental rates fell by -0.3% over the past year.
Mr Kusher said, “Since we started tracking annual rent changes back in 1996, the May 2016 results represent the lowest annual change on record.”
“The rental market slowdown has been rapid over the past year with rents increasing by 1.5% . A number of factors such as the softest wages growth on record have contributed to this slow down. At the same time, we also saw unit construction hit record high levels and a lack of population growth which has contributed to a lesser demand for rentals,” Mr Kusher said.
With rental rates easing over the year and home values continuing to rise rental yields continue to sit at record lows of 3.3% for houses and 4.2% for units.
Gross rental yields for houses are now at record lows in Sydney, Melbourne and Canberra while unit yields are at historic lows in Sydney.