Australian Property Monitors (APM) has today released its rental price report for the March quarter, which reveals wide divergence in rental performance between regions, as well as between detached houses and apartments.
Looking at the detached house segment first, you can see that house rents have exploded in Perth and Darwin, with rents in both cities being positively impacted by the current mining investment boom, extremely low rental vacancies, and in Perth’s case, record population growth. By comparison, rents in the other major capitals are growing at rates more or less below the rate of inflation, with Melbourne experiencing zero house rental growth for around 4 years (see below table).
The situation is a little different for apartments. While Perth and Darwin have, once again, dominated rental growth on the back of the mining boom and low vacancies, rental growth overall has been generally stronger than for houses, with Sydney also recording annual growth well in excess of inflation (see next chart).
A curious aspect of APM’s rental release is that it shows house rental yields in Melbourne increasing by 3% annually, despite zero rental growth (see next table).
Such an outcome (i.e. 3% growth in yield on stagnant rents) would imply that Melbourne house prices have fallen by -3% in the year to March 2013. Yet, APM’s house price results for the December quarter showed Melbourne house prices rising by 0.5% over the quarter and by 2.4% over the year (see next table).
Either Melbourne house prices have tanked in the yet-to-be-released March quarter (highly unlikely), or something strange is going on with APM’s rental yield calculation.
Full report below.
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APM Rental Price Report (March 2013)
