The December quarter consumer price index (CPI) data, released yesterday by the Australian Bureau of Statistics (ABS), revealed a continued moderation of rental growth at the national capital city level.
According to the ABS, rents nationally grew by 0.8% in the December quarter of 2012, which was the equal lowest rate of quarterly rental growth recorded since June 2006 (the prior quarter also recorded 0.8% rental growth):
On an annual basis, rental growth nationally slowed to 3.7% in the latest quarter, which was the slowest rate of rental growth since the December quarter of 2006:
Rental growth diverged significantly across capital cities, with Perth (+1.3% QoQ; +6.5% YoY), Sydney (+1.0% QoQ; +4.4% YoY), Darwin (+1.0% QoQ; +4.2% YoY), and Canberra (+0.8% QoQ; +3.1% YoY) recording the strongest rental growth, and Hobart (+0.3% QoQ; +1.7% YoY), Melbourne (+0.4% QoQ; +2.5% YoY), Adelaide (+0.5% QoQ; +2.5% YoY),and Brisbane (+0.6% QoQ; +2.7% YoY) the weakest (see next chart).
The relief of slowing rents may be short lived, however, with population growth picking-up significantly over the past year which, based on recent experience, suggests that rents may soon be on the rise (see next chart).
unconventionaleconomist@hotmail.com
For Rent signs are everywhere but no one is renting. Maybe more people are moving in with each other or back to mum and dad.
I too see FOR LEASE signs on properties in desirable areas sit for ages.
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The fact that the gov’ is allowing immigration en masse while things are worsening and job losses increasing is nothing short of criminal.
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“Quick, lets get as much of that dirty Chinese money over here before it all goes belly up”…. The powers that be deserve to be lynched.
Agree. Without consideration of household formation statistics, pure immigration figures are unable to tell the complete story.
UE has shown the reversal of the long term trend of smaller households in previous work.
It is not simply supply & demand.
It is supply + demand + household formation (move to larger households and going back to mum and dad’s basement where you used to smoke bongs aged 17) + REAL income growth (sweet FA and flat-lining as shown by Mark the Graph).
The large macro factor in play as always is debt. Too much debt goes into repaying the rentiers for the use of our own money system -> huge amounts of demand removed from the REAL economy -> huge deflationary force in terms of prices of goods and services -> you get laid off, go to part time or see no real wage increases -> rental market can not bear any increases in rent; in fact, you can see falls in nominal rents (this is about to happen in Melbourne).
Unfortunately, our conflicted eCONomists like Doc “I love to gesticulate wildly” Ando & Craig “I love to do pull ups” James seem to have missed economic history 101 in their trite analysis…
I agree, the Chink money will destroy Australia. They are holidaying here in record numbers, as they find out how to get here permanently. Latest Labor policy change is that if they have 5 million they can get in. That means millions of Chinks are on the way. They have doubled in number since 2005, as have the Indians. That is exponential growth. It has to be stopped before we whites are swamped.
lol – here we go again.
Yeah, I thought on a first quick read he was serious.
Chink refers to narrow eyes. The term is not offensive. Carrot-top refers to a person’s red hair. Is that very offensive?
Both terms sound offensive. If comments go down that path I will stop reading altogether. There are heaps of derogatory terms which are not appropriate so keep them to yourselves and please keep MB civil and respectful.
No wonder the world is in the proverbial toilet with precious “wrap me in cotton wool” people like you around.
Most people come to MB for conversation and insight, not to waste time reading petty abuse. There used to be debate and humor here, now there is malice.
You seem to take pleasure in abusing random people in the social media. All the best.
+1 Goldilocks. The tone has definitely deteriorated – malice all too often employed.
Thanks 3d1k. Long time readers are well aware of various aspects of what’s going on in the world finances and politics as well as different scenarios that may affect assets of various sorts. Maybe there is fatigue at the uncertainty and keeping life on hold and that’ s why people are getting so aggressive.
Good to see out friends are National Action are alive and well
douglas…. Why so angry at those whom want to come to our shore and work hard.
Who is going to change your nappy when you to old to walk to the dunny?
You should be getting more angry at specuvestors whom crowd out owner-occupiers and parasitic agents and spruikers who propogate lies further inflate the bubble.
Please note I am a Male Red head in his late 30′s.
We are multi cultural society.
Cut the name calling.
> Who is going to change your nappy when you to old to walk to the dunny?
As my luck has it – we all may be only worth enough to afford a dunny as a PPoR…
As to “you should get angry at ….” I think you forgot the powers that be who have vested interests in keeping the can rolling down the road.
As long as the dunny has “water glimpses” then you should get a good price for it.
The threat from foreign investment and immigration is to the lower classes, people who are on good salaries and in high positions benefit.
It would surprise many to know I know rent a room with all Chinese. What I have noticed is the amazing stories of how much tax dodging, fraud and scams are going on. This does not really affect the wealthy to a large degree but the impact on the poor is huge.
I think there is a strong reason for a boycott of rent, lets face it, if everyone does it what can anyone do about it.
PS, if I was Chinese I would do the same thing, and most of my anger is not at them but at big business, business lobby groups and gov for stripping the chances of life away for the average person.
The argument of everyone been lazy in the west is poor at best. We wanted and created a life style that should have been easy, but now it gets hard. You have two to three generations of people that grow up in an easy life style, only to find that they had to chance pace and very fast to compete against 3rd world workers. The reason why THEY work so hard is because it really is a matter of life or death in their countries with no gov support.
Violence is a perfectly acceptable solution if one is displaced by another for profit.
This comments thread is weird.
Rental rates generally track median incomes fairly closely.
See? Incomes.
Ranting about immigrants is off topic (and boring).
I can only say that the rental situation in Perth as to increases is a fiction of REAs. Just had a look again at RE.com.au (moving today) and nothing has changed, lots of places have been on there over a month and still available. Landlords still think they can keep bumping the rent and get away with it.
Probably have to disagree slightly here Leith, I have been renting a 2 bedroom unit in Sydney for $520 per week since Sept 2011 , During that period my Landlord has received reductions in the cash rate of 1.75%. If I assume that they have a loan of 300k on their 520k unit this represents over $100 a week in reduced interest repayments (or on the flip side my landlord has received an inverse rent rise of an additional $100 per week in les than 2 years (representing a 20% income rise for his unit per annum) now thats a pretty handy pickup in anyones books. Needless to say I have not received a rent rise since I moved in. We are looking to move to a larger unit or small house due to the children and I have been watching the rental market in our area for about 6 months and I have noticed that rents are starting to drop (not by alot I would say 4-6% but beginning to drop just the same.
So the consensus is the Asian hordes are pushing up prices. No surprise there.
HERRSELF – REPORTER
[Tracey Curro interviews Pauline Hanson in 1997] Are you xenophobic?
PAULINE HANSON
Please explain?
HERSELF – REPORTER
Xenophobia means a fear of all things foreign.
PAULINE HANSON
No, I don’t think I am.
Simple supply and demand. Any horde with sufficient money would have the same effect.
I’m detecting a lot of racism on this site.
Please explain:
1) What racism have you detected?
2) Is this a good or bad thing in your opinion?
immigration is certainly too high and exists primarily to benefit big business as it creates more consumers. it also helps those already established via higher asset prices. – meanwhile the rest are left to fight over existing resources with immigrants and their often ill earned dosh (or mass printed dosh).
That said, I dont blame immigrants, I would move here as well. However, running a country is not a charity, the beneficiaries are supposed to be the constituents.
A population of 7 million in post WWII Australia absorbed 1 million immigrants in less than 20 years.
There was no blow out in property prices, or ongoing infrastructure shortfalls.
The eocnomic activity they generated, was considerably captured in taxes, to pay the what was necessary… not filtered into the pockets of the rentier.
I blame both. What right do these countries think they have breeding so much and making life so cheap? What right do these greaseball, snotty, bleeding heart and inbred spivs think they have selling out Australians? The very people who created this country from the ground up.
Well, they both certainly do have the right, as there’s not enough momentum against it, or rather the majority is against it but they simply don’t have the power. I see an awakening here for the most part, which is good to see.
Imo no amount of economic smarty pants is going to counter a sheer force of numbers of people.
How does the increase in rents affect the rent vs buy calculations done 4 years ago?