Newly built apartment building in Maylands with for lease sign
Photo Record numbers of new apartments are weighing on rents.
Capital city rental prices have fallen 0.2 per cent over the past 12 months, in a worrying sign for a property market bloated with investors.
•Rents have dropped 15.6 per cent in Darwin and 12.8 per cent in Perth from peak levels
•Melbourne, Sydney, Canberra and Hobart recorded modest annual rental growth
•Real estate advertiser Domain says it expects “upward pressure” on rents in most capitals
It is the first time in the 20-year history of CoreLogic RP Data’s Rental Review that it has recorded annual rental rates falling and it highlights the patchy nature of the market.
There were significant, and unsurprising, drops in resource-exposed towns, with Darwin rents plummeting 11.5 per cent and Perth dropping 8.4 per cent over the past 12 months.
Darwin rents are now sitting more than 15 per cent below their peak levels, while Perth is off almost 13 per cent as the end of the resources boom sees population growth in these cities stalling.
Even in the large east coast capitals, rents were barely keeping up with general inflation – Melbourne rents rose 2 per cent, and Sydney picked up a modest 1.4 per cent.
Over the month of March, combined capital city unit and house rents picked up, but CoreLogic RP Data researcher Cameron Kusher said that is likely to be seasonal demand and he does not expect the increases to continue.
“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,” he observed.
(Source: By business reporter Elysse Morgan, Updated Thu 7 Apr 2016, 2:08 PM AEST)