CoreLogic’s head of research, Eliza Owen, has released research showing that regional property rents are growing at triple the rate of capital cities, soaring 9.6% in the year to April 2021:
An unprecedented rise in regional property rents.
The next chart shows the growth in rents at the state and capital city levels. As you can see, regional rents are stronger across all states & territories with the exception of WA and NT.
Regional rents are growing faster across most jurisdictions.
The next table shows select rental metrics of major sub-markets across Australia, “revealing extraordinary tightening of regional rental markets. Of the 25 regions analysed, total available rent listings have, on average, halved over the year”. The average time a rental property spent on the market has also fallen from 25 days in the three months to April 2020 to 17 days over April 2021:
Regional rental listings have plummeted.
Thus, “tenants are having to compete harder for rental accommodation in major regional centres, both in terms of their wallet, and the pace of their decision making”.
Eliza Owen cites the following reasons behind the rapidly tightening regional rental markets:
- Less people moving from regions since the onset of COVID. Migration away from regional Australia to capital cities fell to 190,151 in the 2020 calendar year, around -4% below the series average.
- More people have moved to regions through the September and December quarters.
- Since remote work tends to be concentrated in the ‘knowledge economy’, those migrating from cities to the regions are likely to be skewed to higher-income workers, which would put upward pressure on prices and rents.
- The closed international border and eased restrictions have boosted domestic tourism, which may have implications for rentals in regional areas by converting longer-term rental stock to short-term rentals.
