CoreLogic has released its quarterly rental review, which reveals that rents fell for the third consecutive month, driven by sharp falls across Sydney:
In fact, the only capital city to record strong rental growth in the year to September was Hobart, where rents rose by 6.2%.
Hobart is also the rental growth leader over the past decade, recording growth in excess of 40% across both houses and units:
With dwelling values now rising strongly, at least across Sydney and Melbourne, rental yields are starting to fall:
CoreLogic’s head of research, Tim Lawless, summarises the rental market as follows:
“The broad based weakness in rental conditions can probably be attributed to a rise in rental supply following the surge in investment and residential construction activity through the previous housing boom which has contributed to rental supply. Additionally, as first home buyer numbers have surged, this has likely contributed to a reduction in demand as renters convert to buyers.”
“Markets where rents are rising the fastest have generally seen less of a supply response, creating tight rental conditions and pushing rents higher.”
Looking ahead, we expect the rental market to tighten over 2020 and 2021, given the sharp fall in dwelling construction amid ongoing strong population growth: