Australian rental growth stuck at record low

CoreLogic has released its monthly housing chart pack, which includes the following graphic showing that rental growth nationally is stuck at its lowest level on record:

As shown above, rents across the combined capitals fell by 0.1% in the year to June, driven by a hefty 2.7% decline across Sydney.

The below table shows the breakdown on a monthly, quarterly and annual basis:

According to CoreLogic:

The annual change in combined capital city rents remains at record low levels (based on data which is available back to 2005)…

Brisbane and Perth are the only two capital cities in which the annual change in rents over the past year was superior to growth over the same period in 2018.

With the labour market softening, wage growth to remain weak, and lots of apartments still coming on line, the immediate outlook for rents is soft.

Unlike mortgages, you cannot leverage rents.

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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