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CoreLogic has recorded the strongest annual rent increase for the nation’s capitals, with Perth reporting a 13 per cent jump year-on-year.
According to CoreLogic’s digital Mapping the Market tool, 44.4 per cent of house and unit markets have recorded a rental increase of 10 per cent or more in the year to May, with only 6.7 per cent of the 3,812 markets analysed recording a decrease in rents for the period.
CoreLogic’s rental insights for June 2023 found that almost 1,700 Australian house and unit suburbs recorded a rental increase of 10 per cent or more, despite the pace of rental growth showing signs of easing, with its national rental index showing the rate of rental growth softening slightly, with rents going up 0.8 per cent in May when compared to 0.9 per cent in April and 1 per cent in March.
CoreLogic economist Kaytlin Ezzy said the slowdown in the monthly growth rate had contributed to a fall in the annual, which dipped below double digits for the first time in 10 months, with rents nationally increasing 9.9 per cent over the 12 months to May.
The data showed Perth leading the increases on year-on-year, with a 13 per cent rise, followed by 10 per cent increase in Melbourne and 9.4 per cent lift in Brisbane.
She added that the slowdown was primarily being driven by a slowdown in regional markets, where rents increased 0.3 per cent over the month, down from the record monthly growth rate of 1.2 per cent recorded in March.
“Regional rental growth has slowed dramatically from a year ago while capital city rents were up 1.0 per cent in May,” Ms Ezzy said.
“When you break that figure down further by property type, we can see the unit sector is under the greatest pressure, with rents increasing at a faster rate than houses due to their relative affordability.”
Furthermore, 225 house and 29-unit suburbs saw declines in rent in the past year, with the majority being located in Canberra and regional areas, according to Ms Ezzy.
In Sydney, 38 markets had rents decline, mainly located on the Central Coast, while Melbourne saw four annual rent decreases, while houses in the north-east suburb of Ascot were Brisbane’s only market to record rent falls.
“In the past year we’ve seen rents increase in every capital and rest of state region except for Canberra where there’s been a 1.9 per cent decline,” Ms Ezzy said.
“Canberra was previously the country’s most expensive rental city until Sydney overtook it in December.
“The softening rental conditions in the ACT is likely due to there being more stock on the market.
“Canberra’s vacancy rate has increased from 0.7 per cent in March 2022 to 2.2 per cent, putting it second behind Hobart (2.7 per cent). More stock means tenants have more choice and potentially more power when negotiating their rent.”
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