CoreLogic has released its March quarter rental review, which reveals that national rents grew by 3.2% over the first quarter of 2021 – the strongest national rental growth since 2007:
Australian rents surged in Q1, driven by the smaller capitals and regions.
In the year to March 2021, rents grew by 3.9% nationally.
Rental growth was much stronger in Q1 across the combined regions (4.1%) than the combined capitals (2.9%). The difference is even more stark over the year, with capital city rents rising only 2.2% versus 8.6% growth across the regions.
Whereas house rental growth was stronger than units across the combined capitals, but weaker across the regions:
Nationally, house rents have grown stronger than unit rents.
Melbourne continues to records the weakest growth in rents, with house rents up 1.6% in Q1, while unit rents were unchanged over the quarter. Over the year, Melbourne rents rose by only 0.9% for houses, but fell 8.2% across units:
Annual rents fell across Melbourne, but were turbo-charged across Darwin and Perth.
By contrast, rental growth was extreme across both Darwin and Perth, making up for years of rental declines.
Finally, national gross rental yields were recorded at 3.55%, down from 3.71% over the December quarter and 3.76% a year earlier as dwelling values outperform rental growth:
Gross rental yields have hit a record low.
Rental yields should continue to compress as price growth outpaces rents.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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