Weekly rental rates in Australian capital cities were unchanged in September but in the last three months have risen at their slowest annual pace ever.
Indeed, the latest CoreLogic RP data report shows that the annual pace of rental growth across all capital cities is at a new record low of 0.5% in the year to September.
Despite recording the strongest growth, Melbourne rents rose just 2.1% over the year and rents have fallen over the year in Perth and Darwin. They have increased by just 0.3% over the first three quarter of the year.
Overall the combined capital city rental rates are recorded at $487 per week for houses and $462 per week for apartment units and the firm says that it is anticipated that the rate of rental growth will continue to slow over the coming months due to increased supply of housing and rental stock and slower migration rates.
The report points to an ongoing softening of rental growth and explains that the construction boom across the capital cities coupled with slowing population growth, low mortgage rates and the heightened level of activity from investors are the major contributing factors to the slowing rental growth.
Three of the cities which have seen the largest growth in new housing supply and investor activity over recent years; Sydney, Melbourne and Brisbane, have continued to record rental rises over the past year however, each city is seeing a slowing in the pace of rental growth.
‘It is clear that the increase in investment stock is providing landlords with little scope to lift rental rates while the low mortgage rate environment provides little incentive to push yields higher,’ the report says.
Looking across the individual capital cities, over the past year, Sydney and Melbourne have recorded the greatest increases in weekly rents however, their rates of growth have slowed relative to a year ago.
Over the past month, weekly rents have moved lower across every capital city except Sydney where they were unchanged and in Melbourne and Hobart where they rose.
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Source: Property News Spain