Rental Growth Slump Continues

Monthly rental analysis from CoreLogic RP Data shows that rental rates across the combined capital cities fell by -0.2% in June 2015 and the annual rate of growth continues to slow reaching new record lows.

Across the combined capital cities:

• Rental rates are recorded at $487 per week and they have fallen by -0.2% over the month, are unchanged over the past three months and have increased by 1.1% over the past 12 months.
• The 1.1% annual rise in capital city rents is the slowest rate of growth on our records which date back to December 1995.

CoreLogic RP Data research analyst Cameron Kusher noted that the sluggish pace of rental appreciation continues to be attributed to the ongoing boom in dwelling construction across Australia's capital cities accompanied by record high participation in the housing market from investors. A high proportion of the inner city unit development in particular is being targeted by domestic investors and foreign purchasers.

Looking across the individual capital cities over the past year:

• Over the past three months rents are lower in all cities except for Sydney, Melbourne and Canberra.
• Sydney and Melbourne are recording relatively stronger rental growth despite a large surge in new supply and high levels of investment purchasing.
• The rate of rental growth is slowing and continues to rise at its slowest annual rate on record.
• Rents rose by 0.1% over the quarter & 1.1% over the past 12 months.