If you rent a house in Australia, I have some good news for you; rental rates in Australian capital cities have dropped compared to last year, an event that hasn’t occurred in at least twenty years.
CoreLogic RP Data’s latest review shows rental prices falling by 0.2% in this year up to March, making the current national average price $486 per week. When splitting houses and units, houses average at $489 per week (down 0.5% over 12 months), while units are sitting at $469, which is actually a rise of 1.5% due to houses being rented more than units.
Whilst these changes are small, CoreLogic RP Data research analyst Cameron Kusher says that the declining price of rents are a significant result.
“We have been tracking the annual change in capital city rents since 1996 and this is the first time we have seen rental rates falling.”
So what’s causing the drops? Mr Kusher says that an increase in supply, slowing population growth and record-low wage growth are among the key factors.
“The extra accommodation supply, as a result of the current building boom, along with the recent record high levels of investment purchasing is adding substantial new dwelling supply to the rental market at a time when the rate of population growth is slowing from quarter to quarter.”
Recent CommSec research shows that permanent and long-term arrivals to Australia are at the lowest level in 9 years, contributing to slow population growth.
What does this mean for you? Well if you rent, your wallet is unlikely to receive any rental rise shocks until economic conditions improve, which means n the other end of the stick, landlords will have a tough time justifying price hikes. Will they get any lower? We’ll have to wait and see.
Here’s a sick table with some riveting stats supplied by CoreLogic RP Data. Suss it out at your leisure.
Source: Business Insider