ABS: Property rents climb out of gutter

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

While property rents rose 0.1% of the quarter:

Quarterly rents

Rents rose 0.1% in Q2.

However, over the year to June 2021, rents were dead flat (0.0%):

Annual change in rents.

Zero annual growth in rents in Q2.

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

Annual rents by state

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

Annual rents fell across Sydney (-1.5%) and Melbourne (-0.8%), but were flat or rose elsewhere.

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

Two-speed rents

Rental growth remains two-speed.

The ABS’ results obviously differ markedly from CoreLogic’s, which reported the strongest annual increase in rents since February 2009:

Rental growth

Broad-based boom with the exception of Melbourne and Sydney apartments.

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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