ABS: property rents continue to sink

The Australian Bureau of Statistics (ABS) yesterday released consumer price index (CPI) data for the March quarter of 2021, which revealed that property rents across the combined capital cities fell sharply over the prior 12 months.

While property rents were dead flat (0.0% growth) of the quarter:

Quarterly change in rents

Australian rents were flat in Q1, according to the ABS.

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However, over the year to March 2021, rents nationally fell by 1.4%:

Annual rental growth

Capital city rents fell by 1.4% in the year to March 2021.

The next chart summarises rental growth across the capital cities over the past quarter and year:

Rental changes by capital city

Rental growth was two-speed in the year to March 2021.

Annual rents fell heavily across Sydney (-2.9%), Melbourne (-1.4%) and Darwin (-2.3%), but were flat or rose elsewhere.

The next chart plots the time series of annual rental growth, which shows a mixed bag:

Annual rental growth by capital

Rental growth remains two-speed.

The ABS’ results obviously differ markedly from CoreLogic’s, which reported the strongest rental growth in 14 years:

Rental summary

Australian rents surged in Q1, driven by the smaller capitals and regions.

The reason likely relates to the fact that the ABS measures rents currently being paid across the market, whereas CoreLogic measures advertised rents. Thus, there is likely a stock versus flow issue going on here with the ABS’ rental growth lagging.

Unconventional Economist
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