Despite a resurgence in house prices and strong auction results, the national rental market has continued to struggle in recent months.
Rents were -0.1 per cent lower across Australia over the month to September 2019, with the median rental value being $436 per week.
The weak rental rates have been trending lower of recent times, with the national rate down over the past three months. However, over the course of the year, rates are still 0.7 per cent higher according to the latest Quarterly Rental Review from Corelogic.
Gross rental yields are currently sitting at 3.99 per cent nationally compared to 4.14 per cent at the end of the previous quarter and 3.85 per cent a year ago.
Gross rental yields remain higher relative to the same time last year across all of the individual capital cities, apart from Sydney and Canberra where yields are at a similar level last year.
Across the country, Adelaide was the only capital city to record a monthly rise in rents (+0.1 per cent), with rental rates lower in Sydney (-0.3 per cent), Melbourne (-0.1 per cent), Perth (- 0.1 per cent), Hobart (-0.2 per cent), Darwin (-0.2 per cent) and Canberra (-0.3 per cent), while Brisbane was unchanged.
Across the individual capital cities, annual rental growth was positive across all cities except Sydney (-2.2 per cent) and Darwin (-2.7 per cent).
With its tight supply and low vacancy rate, Hobart became more expensive to rent a property than Melbourne. Hobart has a current median rental value of $464 per week, making it the third most expensive city to rent in, after Sydney ($571 per week) and Canberra ($538 per week).
According to CoreLogic’s head of research Tim Lawless, the recent weakness is a flow-on effect from rising supply.
“The broad-based weakness in rental conditions can probably be attributed to a rise in rental supply following the surge in investment and residential construction activity through the previous housing boom which has contributed to rental supply,” Mr Lawless said.
“Additionally, as first home buyer numbers have surged, this has likely contributed to a reduction in demand as renters convert to buyers.
“Markets, where rents are rising the fastest, have generally seen less of a supply response, creating tight rental conditions and pushing rents higher.”