ABS rental growth totally detached from reality

The Australian Bureau of Statistics (ABS) on Tuesday released consumer price index (CPI) data for the December quarter of 2021, which revealed that property rents across the combined capital cities are still experiencing anaemic growth.

Property rents rose only 0.1% of the quarter:

Over the year to December 2021, rents rose only 0.4%:

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

Annual rents fell across Sydney (-1.9%) and Melbourne (-1.1%), but rose elsewhere.

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

The ABS’ results obviously differ markedly from CoreLogic’s, which grew at 8.4% across the combined capitals in 2021:

The reason likely relates to the fact that the ABS measures rents currently being paid across the market, whereas CoreLogic measures newly signed 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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