The September 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 just 0.2% growth in the September quarter and grew by just 0.6% over the year:
At the individual capital city level, annual rental growth was positive in Hobart (+4.5%), Canberra (+3.0%), Sydney (+1.9%), Melbourne (+1.8%), and Adelaide (+0.8%), but fell heavily in Perth (-6.1%) and Darwin (-4.6%), and fell moderately in Brisbane (-0.1%):
When adjusted for inflation, real rents nationally fell by 1.2% over the year at the national level and have fallen by 1.0% since December 2011 (i.e. 6 3/4 years):
Adjusting for inflation at the individual capital city level, annual real rental growth was positive in Hobart (+1.7%) and Canberra (+0.6%), but fell in Perth (-7.2%), Darwin (-5.8%), Brisbane (-1.9%), Adelaide (-1.0%), Melbourne (-0.4%), and Sydney (-0.1%):
The immediate outlook for rental growth nationally remains soft given dwelling completions are still 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.
