The December quarter consumer price index (CPI) data, released on Wednesday 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 0.5% over the year – the equal lowest growth in the series’ 45-year history:
At the individual capital city level, annual rental growth was positive in Hobart (+5.4%), Canberra (+3.0%), Melbourne (+1.8%), Sydney (+1.4%) and Adelaide (+1.1%), but fell heavily in Perth (-6.1%) and Darwin (-4.4%), and was flat in Brisbane:
When adjusted for inflation, real rents nationally fell by 1.2% over the year at the national level and have fallen by 1.4% since December 2011:
Adjusting for inflation at the individual capital city level, annual real rental growth was positive in Hobart (+2.3%) and Canberra (+0.5%), but fell in Perth (-7.3%), Darwin (-5.5%), Brisbane (-1.5%), Adelaide (-0.5%), Melbourne (-0.3%), and Sydney (-0.2%):
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:
The reality is, you can’t leverage rents.
