CoreLogic’s rental results for February came in hot, with rents nationally rising by 0.8% to be up 2.0% (houses) and 2.4% (units) over the quarter. The pick-up in monthly rental growth has been driven, in part, by the return of immigration:
The pace of rental growth has shown a subtle rebound over the past two months, which can partially be attributed to the seasonal strength in rental markets through the first quarter of the year. Nationally, CoreLogic’s rental value index, which utilises a hedonic regression methodology similar to the HVI, was up 0.8% in February, holding firm from January (0.8%) and up from the 0.6% growth recorded in December.
The February rise in rents was focused within the unit market with the national unit rental index up 0.9% over the month and 2.4% higher over the rolling quarter compared to +0.7% and 2.0% for houses respectfully. According to Mr Lawless, this stronger trend in unit rents is most visible in Sydney and Melbourne.
“Anecdotally, demand for unit rentals in these cities has been bolstered by a combination of worsening rental affordability deflecting more demand towards the higher density sector, where rents tend to be lower, and demand starting to return from overseas arrivals,” he said.
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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.
