Published : 6 April 2016
The release of CoreLogic RP Data's Rent Review results for February confirm that over the coming months rental rates could begin to fall on an annual basis due to additional new rental supply entering the market.
According to research analyst Cameron Kusher, “With construction activity set to peak over the next 24 months, and with many new properties still to settle, there is a real possibility that rental rates will fall over the coming months.
“Based on our expectations, landlords have little scope to lift rental rates while for renters, it potentially means more surety in securing accommodation and the potential to upgrade into a higher level of accommodation for a similar cost.
“The cause of this current slowdown in rental growth is falling wages, excess rental supply in certain areas and lower rates of population growth and population mobility impacting on demand for rental accommodation,” Mr Kusher said.
CoreLogic RP Data reports that in February, capital city rental rates continued to record no change, while rental rates increased over the year in Sydney (+1.5%), Melbourne (+2.2%) and Canberra (+1.6%) and are unchanged in Hobart. Rents have fallen over the year in Brisbane (-0.7%), Adelaide (-0.4%), Perth (-8.4%) and Darwin (-13.3%).
Currently, combined capital city rental rates are $488/week for houses and $467/week for units.
Dwelling rental rates across the combined capital cities have not moved and continue to sit at now $485 per week for the past year; at the same time last year rental rates had increased by 1.7% highlighting that the slowdown in rental conditions has been quite sharp over the year.
Rental rates in Brisbane, Adelaide, Perth and Darwin are currently experiencing some of their largest annual falls on record.