One of the most popular in the suite of RP Data Property reports over the years has been the company’s Quarterly Rental Review. Compiled by research analysts Tim Lawless and Cameron Kusher, the findings of the review released today confirm that across Australia, rental markets remained relatively ‘flat’ and with little to zero growth to report in some areas over the first quarter of 2014.
Despite this, analyst Cameron Kusher said that some cities continue to record annual rental growth, albeit, at a much more subdued levels than the five year average.
Mr Kusher said that while the overall performance across the unit market was slightly stronger over the year when compared to the detached housing market, performance on a city-by-city basis was less aligned, with some cities (Perth and Canberra) recording a relatively large fall in advertised rents over the year.
“With home value growth comparatively strong we are seeing a deterioration of rental yields in most capital cities. We expect that rental growth is like to continue at moderate levels over the coming year, due largely to the climbing demand for housing which is highlighted by escalating sales transactions nationally.
“A slow down across some of the previously strong resource intensive areas of Australia can be attributed to a downturn in overall housing market conditions within these regions,” Mr Kusher said.
Snapshot – Quarterly Rental Review:
- Across the capital cities, rental rates remained unchanged over the first quarter of 2014 at $430/week for houses and $410/week for units.
- Nationally, rents also remained unchanged for houses at $395/week and increased by 1.3% over the quarter for units to $390/week.
- Over the 12 months to March, capital city rents for houses rose by 2.4% and 2.5% for units.
- Nationally, over the year to March, rents for houses increased by 1.3% and 2.6% for units.
- On both a capital city and national level, rental rates are increasing at a lower rate than they have been over the past five years.
- Strongest performing capital city market
(12 months to March 2014): Melbourne houses (+2.7%), Darwin units (+5.8%).
- Weakest performing capital city market
(12 months to March 2014): Canberra houses (-5.8%), Canberra units (-4.7%).
According to recent vacancy rate data sourced from the REIA, it shows that vacancy rates across many of the capital city markets increased over the December quarter. Sydney continued to have the lowest vacancy rates of any capital city market with just 1.8 per cent of rental properties vacant, followed by Melbourne (2.9 per cent).
Nationally, rental rates increased by 1.3 per cent for houses over the year to March 2014 and by 2.6 per cent for units. Mr Kusher said that by comparison, the average annual growth over the past five is somewhat lacklustre.
Rental growth across the combined capital cities was stronger for houses, with rents up 2.4 per cent year-on-year to $430 per week, while for units; rents in March 2014 were 2.5 per cent higher than at the same time the previous year at $410 per week.
Across the country’s detached housing market, Melbourne was the only capital city to record annual growth (2.7 per cent) higher than the five year average for the city.