The COVID-19 pandemic has created diversity across the Australian rental market with international border closures and stalled immigration continuing to impact capital cities, according to CoreLogic RP Data.
National rental rates rose by 0.6 per cent over the month of December, pushing rents up 1.9 per cent higher over the year – the largest increase since 2018.
Regional markets outperformed capital cities with both house and unit rents up 1.1 per cent in December and jumping 5.3 per cent annually.
CoreLogic’s Rental Review for the December quarter, released yesterday, however, shows weak conditions for units across the largest capital cities.
In particular, in Melbourne and Sydney where inner-city unit markets recorded the largest falls of 7.6 per cent and 5.7 per cent respectively.
CoreLogic research director Tim Lawless said COVID-19 has not only disrupted how we live but also reshaped housing demand with a swing towards lower density options.
“Higher density housing has seen less demand during the pandemic; a trend that has been amplified by stalled overseas migration and remote working opportunities luring residents further afield,” he said.
“Whether this trend has some longevity is yet to be seen, but international borders are likely to remain closed for some time yet and for many, remote working conditions have proved to be productive.”
Combined capital cities figures reveals the contrast in house and unit rents which has continued to impact the market throughout 2020.
During the quarter combined city house rents increased 0.7 per cent in December and 0.8 per cent in the quarter. At the same time, unit rents fell 0.3 per cent in the month and 1.6 per cent in the quarter.
Overall, house rents increased by 3.3 per cent annually; while unit rents declined by 4.6 per cent.
Canberra has overtaken Sydney as the most expensive capital city to lease a house in 2020 with a median rental value of $626 per week.
Perth delivered strong returns for investors with dwelling rents up 9.7 percent during 2020 – the best performing capital city. It was followed by Darwin with its dwelling rents up 8.8 percent.
National gross rental yields were recorded at 3.71 per cent – down from 3.81 per cent recorded a year earlier – as dwelling values outperformed rental growth in 2020.