Renters Have Good News Notes Chifley Securities

The most recent rental data shows that rental rates have increased at their slowest pace in history as of last month. Sydney and Hobart have seen the highest rental growth in the past year says Chifley Securities.

When you have high rental growth concentrated in an area it’s an indication that there is some sort of a disconnect in the supply and demand of the market. Sydney stands out because they are seeing a strong population growth creating more demand for accommodation in the city.

Sydney and Melbourne have recorded low rental yields and investors in these two cities are clearly not going after rental returns. They are almost exclusively looking at capital growth plays.

Brisbane and Adelaide currently appear to be more financially attractive, however buyers should not expect value growth to match that of Sydney or Melbourne any time soon.

Let’s turn our attention and take a look at this information by the numbers; rents are rising at their slowest annual rates on record. Sydney and Hobart not surprisingly have recorded the greatest increases in weekly rents.

  • Combined capital city rental rates increased by 0.1% in May
  • Combined capital city rental rates are recorded at $488 per week
  • Rents rose by 0.1% over the month, 0.6% over the quarter & 1.5% over the past 12 months
  • With home values growing faster than rents, gross rental yields continue to edge lower

Data Provided by CoreLogic

Capital city rental rates continue to rise however, the rate of increase has slowed from an annual increase of 2.2% a year ago to 1.5% currently.