CoreLogic has released its February unit review, which reports that the “pace of monthly rental growth continues to accelerate across Australia’s unit market, from a 1.0% increase in January to a 1.2% rise in February”.
This “continued surge in unit rents saw the national trend record its highest annual growth on record (13.7%), overtaking the month prior for the eighth month in a row”, according to CoreLogic:
Source: CoreLogic
The record rental growth is in response to the vacancy rate plunging to only 0.80% across the combined capital cities, down from around 5% two years earlier:
Source: CoreLogic
CoreLogic notes that “among the capitals, Sydney and Melbourne recorded the strongest unit rental growth over the month, rising 1.6% and 1.4%, respectively, with overseas migration fueling rental demand for inner-city apartments”.
CoreLogic also believes rental growth will remain strong because “we’ll unlikely see much in the way of a supply increase over the short term”.
Separate asking rents data from SQM Research, released last week, showed extraordinary growth of 21.4% across the combined capital cities, led by extreme growth across Sydney (+25.2%), Melbourne (+21.9%) and Brisbane (+20.8%):
Source: SQM Research
Obviously, the strong rental increases are being driven by record high population growth of nearly 500,000 people in 2022, driven by record high immigration of nearly 400,000:
Monthly visa data to February shows net temporary arrivals continue to surge on the back of international students:
This suggests the rental market will get worse before it gets better under the Albanese Government’s extreme immigration policy.
