CoreLogic: Rental growth hits historical lows

CoreLogic has released new data showing that annual rental growth across Australia is stuck at a historically low 0.4% nationally, with rents across the combined capitals actually falling by 0.1% in the year to May:

As shown above, Sydney (-2.9%) and Darwin (-5.2%) were the main drivers of the falling growth across the combined capitals.

The data accords with the ABS’ rental series, which also recorded historically low 0.4% growth in the year to March:

That said, because prices have fallen far more than rents, rental yields improved in the year to May; albeit they remain poor in Sydney and Melbourne (which still remain way overvalued):

Looking ahead, rental growth will remain subdued as long as household disposable income growth remains in the gutter:

You cannot leverage rents.

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Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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