Great news for some renters, not so much for landlords. According to the June Rent Review by CoreLogic, we’ve just clocked the largest annual drop in rental prices on record.
Rates across all capital cities fell by 0.4 percent from a year earlier. Particularly heavy declines in mining capitals, paired with increasing rental stocks in other capitals have pulled the national average down.
Cameron Kusher, research analyst at CoreLogic says that despite this overall drop, half of our capitals still ended up with higher rents over the year.
“Large rental falls in Perth and Darwin have pulled the combined capital average lower, with rents in Brisbane and Adelaide also lower over the year,” he said.
“However, while a majority of capitals saw a drop in rental rates over the month, on an annual basis, half of Australia’s capital cities actually recorded a rise in rents. These included Sydney, Melbourne, Hobart and Canberra.”
As evidenced by the riveting table below from CoreLogic, the end of the mining boom has seen some massive declines in Darwin and Perth.
Mr Kusher says these weak values will probably continue in the short term.
“It is anticipated that the weakness in the rental market will persist and where on an annual basis, we will see rents fall even further over coming months,” he says.
“The factors forcing rental rates lower include the softest wages growth on record, relatively high levels of housing investment following record highs recently, historically high levels of new construction and the slowing of population growth which creates less overall demand for housing.”
It’s these things, Kusher says, that have left landlords in a bit of a sticky situation.
“The combination of all these factors means that landlords have little scope to increase rents. There are reports that some landlords are having to reduce rents in certain areas in order to maintain their renters.”
So don’t get too excited all you Sydney and Melbourne renters, you’ll still be paying out the ass to live in your chosen city, unless you fancy moving to Perth or Darwin.