Rents within Australia's Major Cities Increased by 0.3 Percent in 2015
PropertyWire recently reported about the latest index data, which showed how tame the residential property rental growth for the major cities of Australia was last year. The rents have only increased by 0.3 percent according to the index data.
The rents in Melbourne increased by 2.2 percent. Sydney and Canberra increased by 1.9 percent while Hobart only increased 0.6 percent. The rates fell by 13.2 percent in Darwin, 8 percent in Perth, 0.2 percent in Adelaide and 0.3 percent in Brisbane.
Cameron Kusher, CoreLogic RP Data's research analyst, said, "We've never seen rental growth as sluggish as it is at the moment. Furthermore, we're expecting to see more of the same over the coming months due to increases in the supply of new housing, rental stock and a further slowdown in migration rates."
The latest CoreLogic RP Data index also revealed that combined city rental rates were pegged at $483, an increase of just 0.3 percent for the past 12 months. This was the lowest rate recorded for an annual growth since December 1996.
Krusher said, "The construction boom across the capital cities, coupled with slowing population growth, low mortgage rates and the recent heightened level of activity from investors are the major contributing factors to the slowing rental growth in 2015."
"Although Sydney and Melbourne saw the largest ramp up in new housing supply, both cities still recorded rental increases over the year, although rental growth is slowing relative to 12 months earlier," he explained.
He added, "It is clear that the increase in investment stock continues to provide landlords with little scope to lift rental rates while the low mortgage rate environment provides little incentive to push yields higher."
Mr. Krusher also told ABC News that there is an obvious supply of new housing that is coming across most capital cities, and she noted that many of these stocks are targeted at investors, which means that there isn't more rental stock available out there.
"So the balance in negotiation, when those leases come up for renewal, is starting to tilt back in favor of the renter as opposed to the owner," he said.