Cotality’s rental data continues to deteriorate.
The latest weekly market indicators report shows that rental listings have collapsed to a fresh low across the combined capital cities:
Source: Cotality
Over the past year, total listings across the combined capital cities have declined by 18.6%, with double-digit falls recorded across every market:
Source: Cotality
The vacancy rate across the combined capital cities also declined to a record low of 1.5%, down 0.4% year over year.
Source: Cotality
The tightening rental vacancy rate has driven a sharp rebound in rental growth, with Cotality’s September quarter rental review reporting that rents rose by 1.4% over the quarter in seasonally adjusted terms, the strongest growth since June 2024.
This surge in quarterly rental growth is illustrated below by Justin Fabo from Antipodean Macro and suggests that CPI rents will also reaccelerate:
Separate rental data from SQM Research also suggests that rental growth has reaccelerated:
Tim Lawless, director of research at Cotality, warned that the resurgence in rents will put upward pressure on CPI inflation.
“Given the large weighting rental costs have in the consumer price index, and the lead-lag relationship between Cotality’s rent value index and CPI rent measure, the recent re-acceleration in rents could have implications for inflation down the track”, he said.
Therefore, the rental market will continue to pose a challenge not only to Australia’s long-suffering tenants but also to the RBA’s efforts to control inflation.
