The Australian Bureau of Statistics (ABS) yesterday released CPI rental data, which showed that rents across the combined capital cities rose 0.7% over the quarter:
ABS rental growth rising.
Over the 2021-22 financial year, rents rose a tepid 1.6% across the combined capital cities, according to the ABS:
Annual rental growth still weak.
Thus, rents grew at around one-quarter the headline inflation rate of 6.1% in the 2021-22 financial year, meaning rents have actually been disinflationary.
The situation is certain to change. Private data providers are recording annual rental growth closer to 10%. For example, CoreLogic reported that Australian capital city rents grew by 9.1% in the year to June 2022 – the highest rate of growth since December 2007:
Strong rental growth on low vacancy rates.
The ABS measures rents paid across the market, whereas CoreLogic and the other private data providers measure newly signed rents.
Eventually, the ABS will update its rental series to match the actual market. And when it does, rents will rise sharply and add to Australia’s inflationary pressures, in turn forcing the RBA to respond with higher interest rates.
