Rents surge by double digits in 44.4% of Aussie suburbs – CoreLogic

Nearly 1,700 house and unit markets across Australia have posted double-digit rental rises over the past year, despite the pace of rental growth showing signs of easing, CoreLogic reported.

CoreLogic’s national rental index showed a slight softening in the rate of rental growth, with rents lifting 0.8% in May, down from the 0.9% and 1% increases in April and March, respectively.

Kaytlin Ezzy (pictured above), CoreLogic economist, said the deceleration in monthly growth rate had contributed to a decline in the annual trend, which dropped below double digits for the first time in 10 months, with rents nationally rising 9.9% over the 12 months to May.

But CoreLogic data indicated that this was primarily due to an easing in regional markets, where rents rose 0.3% over the month, down from a record monthly growth rate of 1.2% in March 2022.

“Regional rental growth has slowed dramatically from a year ago while capital city rents were up 1.0% in May,” 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.”

Capital city house rents climbed 0.9% in May, compared to a 1.4% rise for units.

CoreLogic’s digital Mapping the Market tool, which now includes rental metrics, showed that of the 3,812 house and unit markets analysed, 44.4% posted a rental increase of 10% or more in the year to May, while only 6.7% recorded a decline in rents.

Rents declined in 225 house and 29 unit markets in the past year, the majority of which were located in Canberra and regional areas.

In Sydney, rents declined in 38 markets, with the majority located on the Central Coast. In Melbourne, just four saw annual rental decreases, while houses in the north-east suburb of Ascot was Brisbane’s only market where rents fell.

“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% decline,” 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% in March 2022 to 2.2%, putting it second behind Hobart (2.7%).”

She said the more housing supply provides tenants with more choice as well as potentially more power when negotiating their rent.

CoreLogic Rental Insights for May 2023 also found:

• the gap between median house and unit rents has narrowed to $60/week across the combined capitals and $36/week nationally
• 4,409 additional new rental listings added to the market in May compared to April
• new rental listings were still down -11% the previous five-year average, and total rental listings remained -33.3% below the long-term average
• national vacancy rates lifted from a record low of 1.1% in April to 1.2% last month
• Hobart has the highest vacancy rate of 2.7%, followed by Canberra with 2.2%
• all remaining capital cities has vacancy rates are under 1.5%
• Melbourne posted the strongest month-on-month change in rents, rising 1.4% in May
• sents slipped -0.4% in Canberra and -0.7% in Hobart
• since the onset of COVID-19, capital city rents have increased 25.7% and regional rental values have risen 29.2%, adding the equivalent of $125/week and $116/week to the respective median rent

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