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Category: Housing Industry

Landlords' winter of discontent as rental slump accelerates

Thursday, 7 Jul 2016 09:27:46 | Michael Janda

CoreLogic's data show rents falling 0.4 per cent in June alone. (ABC News)

Private data has shown that rents fell by an unprecedented 0.6 per cent over the past year, as slowing population growth meets a rapid increase in housing supply.

The monthly figures for June from CoreLogic reveal house rents declined by 0.9 per cent over the past year, their largest national fall on records going back to 1996, while unit rents edged 1.5 per cent higher.

The annual decline in overall average rents was driven by a 16.2 per cent slump in the resources-driven city of Darwin, and an 8.6 per cent slide in the similarly commodity-reliant city of Perth.

Adelaide and Brisbane posted small rental declines, while Sydney rents edged higher over the past year at their slowest pace on record.

Melbourne and Canberra saw moderate rent rises, while only Hobart had a strong increase in rents of 4.6 per cent.

CoreLogic's report reveals that Hobart is the only capital city where rents are currently at a record high, with rents slightly off their peaks in most others, Canberra rents 6.2 per cent down on their zenith, with Perth and Darwin 14.8 and 23.3 per cent down respectively.

While Sydney and Melbourne were holding relatively steady over the past year, both cities recorded rental declines in June.

'We will see rents fall further'

CoreLogic research analyst Cameron Kusher said that pain for landlords and joy for tenants is set to continue for some time to come.

"It is anticipated that the weakness in the rental market will persist and where on an annual basis, we will see rents fall even further over coming months," he noted in the report.

CoreLogic said historically high levels of new construction is increasing housing supply at the same time as slowing population growth is reducing growth in demand.

Added to that, the slowest wage growth on records that go back to the late 1990s (probably the weakest since the last recession in the early 1990s) has reduced the ability of tenants to afford larger rent increases.

CoreLogic said tenants now have more choice on offer and may be able to move into superior homes for similar, or even lower, rents.

AustraliaPlus


 

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