In the first quarterly fall since 1972, rent prices were down 1.3 per cent for the June quarter, according to the latest data from the Australian Bureau of Statistics (ABS).
The downward trend coincided with the biggest drop in consumer prices since 1931, with the consumer price index for the June quarter falling 1.9 per cent.
“Weak rental market conditions as a result of COVID-19 lockdown restrictions and rising vacancy rates saw rents fall in most capital cities in the June quarter,” the ABS reported.
REA Group Director of Economic Research, Cameron Kusher noted the results are a clear indicator of how COVID-19 has changed the property market dynamic.
“Rental rates are coming under pressure from multiple sources,” he said.
“We have virtually no migration, there is new stimulus encouraging purchasing from first home buyers who otherwise may have been renters, and then there’s the fact that unemployment is rising, and younger people are most affected.
“With a moratorium on rental evictions in place until September, the next quarter is unlikely to see rental CPI fall as severely.
“Thereafter it is likely rental rates will fall further and will take quite some time to recover to previous highs.”