CoreLogic Quarterly Rental Review

CoreLogic has released its first Quarterly Rental Review for 2018, which tracks the median rental price of houses and units across Australian capital cities and regions.

The quarterly report measures the percentage change in rental prices over the first quarter, which is typically the strongest for rental appreciation and growth, as well as over the past 12 months to March 2018.

According to CoreLogic researcher Cameron Kusher, “The data suggests that in most capital cities the rental market has softened, although values are still rising they are doing so at a slower rate than they have over recent first quarters of the year.”

“From an investor’s perspective, large new housing supply additions and slowing rental growth means that they will need to find ways to differentiate their properties from others. Whether that is on rental cost or by renovation, we would expect that competition for tenants in most capital cities will increase.”

“Rental yields are climbing slightly from historic low levels however, they remain lower than they were a year ago. Investors remain most active in NSW and Vic and have been targeting capital growth rather than rental return. With values now falling, active investors should be more focused on those regions with stronger prospects for value growth and higher rental returns.”

Key findings:

• Nationally, rents climbed by 0.3 per cent in March to be 1.1 per cent higher over the first quarter of 2018 and 2.2 per cent higher over the 12 months to March 2018. In comparison to the first three months of 2017 when rents increased by 1.5 per cent, the growth in rental prices has slowed (-0.4 per cent).
• Rental growth over the first quarter is higher in the regional markets (+1.2 per cent) than in the capital cities (+1.0 per cent). This trend is also reflected in activity over the past 12 months – rents are up 3.1 per cent in the regions compared to an increase of 1.9 per cent across the capitals.
• Over the first quarter, rents climbed in all capital cities except for Darwin (-0.3 per cent). The highest quarterly rental increases were in Hobart (+5.0 per cent), which also reported its strongest first quarter growth on record, and Canberra (+2.3 per cent).
• Over the past 12 months, Hobart reported the highest growth in rental rates (+11.7 per cent). Rents climbed higher in all capital cities except Perth (-1.3 per cent) and Darwin (-1.6 per cent).
• The national median rent is $427 ($426 for houses and $430 for units). Across the capital cities, the median rental is $459 per week. The median house rental in the capital cities is $460 compared to $453 for units. Across the regional markets, both houses and units averaged $355 per week.
• At $374, Adelaide has the cheapest weekly rent out of all the capital cities. The highest median weekly rent is in Sydney, where the cost is $582.
• Rental yields have increased nationally by 0.1 per cent over the past 12 months to 3.68 per cent. The highest rental yields are in Darwin (5.83 per cent) and Hobart (5.01 per cent). Melbourne (2.93 per cent) has the lowest rental yields, followed by Sydney (3.20 per cent).

Key regional variations 

NEW SOUTH WALES

• Renters in Sydney pay the most out of all the capital cities ($582 a week). Rents are up 0.5 per cent over the first three months of 2018 – the weakest first quarter for rental growth in Sydney since 2009.
• Sydney’s Northern Beaches is the most expensive region to rent in New South Wales, with a median rent of $877 per week (up 1.9 per cent over the March quarter), followed by the Eastern Suburbs at$848 per week (up 1.8 per cent over the March quarter).
• Rents are most affordable in Murray ($282) and Far West and Orana ($283). Far West and Orana also had the highest quarterly increase in rent (+6.7 per cent) and the highest current rental yield of 8.3 per cent (up 0.7 per cent over the past 12 months).
• Rental falls for the quarter were evident in Baulkham Hills and Hawkesbury (-0.7 per cent), Sydney’s Inner West (-0.2 per cent) and Inner South West (-0.3 per cent). Parramatta, South West Sydney and Sutherland all recorded a quarterly decline of 0.4 per cent.

Source - https://www.corelogic.com.au/