The June quarter consumer price index (CPI) data, released yesterday by the Australian Bureau of Statistics (ABS), revealed that real inflation-adjusted rents continue to fall.
According to the ABS, rents nationally registered zero growth in the June quarter and grew by just 0.6% over the year:
At the individual capital city level, annual rental growth was positive in Hobart (+3.5%), Canberra (+2.7%), Sydney (+2.2%), Melbourne (+1.9%), and Adelaide (+0.7%), but fell heavily in Perth (-6.6%) and Darwin (-5.8%), and fell moderately in Brisbane (-0.5%):
When adjusted for inflation, real rents nationally fell by 1.4% over the year at the national level and have fallen by 0.8% since December 2011 (i.e. 6.5 years):
Adjusting for inflation at the individual capital city level, annual real rental growth was positive in Hobart (+1.1%) and Sydney (+0.2%), but fell in Perth (-7.6%), Darwin (-6.9%), Brisbane (-2.1%), Adelaide (-1.9%), Melbourne (-0.6%), and Canberra (-0.1%):
The immediate outlook for rental growth nationally remains soft given dwelling completions are yet to catch-up to either approvals or commencements:
Moreover, rents will be held down as long as real household income continues to slide:
You can’t leverage rents.
