CoreLogic’s Cameron Kusher has released a new research report showing that the supply of rental stock is climbing higher, which is likely to maintain downward pressure on rents, which are already experiencing the lowest growth on record:
Over the 12 months to January 2017, there were 362,708 houses advertised for rent and 287,233 units at a national level. The number of rental advertisements over the past year grew 8.7% higher for houses and 9.3% higher for units.
Mr Kusher said, “The rental market is currently seeing historic low rates of rental growth. With the amount of rental accommodation ramping up, it’s easy to see why.
“Keep in mind this data is only those properties advertised for rent and not every rental property will be advertised for rent each year”…
Council areas within Western Australia feature heavily on the list of regions to see the greatest increase in rental advertisements over the year, many of which are located in Perth…
With a record high number of new dwellings still under construction, most of which are units and many of which have been purchased by investors, CoreLogic anticipates that the number of properties advertised for rent will continue to rise.
According to Mr Kusher the impact of this is that rental growth is likely to remain dampened and those in the rental market in most regions will have an increasing number of properties to choose from. He said, “For owners of investment properties and property managers, they should be mindful of their local rental conditions, and set their weekly rents accordingly to maximize their occupancy as well as income. Landlords in areas where the supply of rental properties has shown a rise may find they need to hold their rents steady or in fact, provide a discount on their rental expectations in order to keep or attract tenants.”
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
