The June quarter consumer price index (CPI) data, released yesterday by the Australian Bureau of Statistics (ABS), revealed that Australian rental growth remains stuck in the gutter, posting the equal lowest annual growth in the series’ 45-year history.
According to the ABS, rents nationally were flat (0.0% growth) in the June quarter and grew by just 0.4% over the year:
At the individual capital city level, annual rental growth was positive in Hobart (+5.9%), Canberra (+3.2%), Melbourne (+1.7%), Adelaide (+0.8%), Sydney (+0.3%), and Brisbane (+0.3%), but fell in Darwin (-4.5%) and Perth (-3.7%):
When adjusted for inflation, real rents nationally fell by 1.1% over the year at the national level and have not grown since March 2011 (i.e. for more than 8 years):
Adjusting for inflation at the individual capital city level, annual real rental growth was positive in Hobart (+3.5%), Canberra (+1.4%), and Melbourne (+0.4%), but fell in Perth (-5.3%), Darwin (-5.2%), Brisbane (-1.4%), Sydney (-1.3%), and Adelaide (-0.6%):
The immediate outlook for rental growth nationally remains soft given dwelling completions have just caught-up to approvals and commencements:
Moreover, rents will be held down as long as real household income continues to slide:
That said, dwelling approvals and commencements are crashing at the same time as population growth has accelerated. This points to a tightening rental market in 2020.