Almost 1,700 Australian house and unit suburbs have recorded a rental increase of 10% or more in the past year, despite the pace of rental growth showing signs of easing.
CoreLogic’s national rental index shows the rate of rental growth has softened slightly, with rents up 0.8% in May compared to the 0.9% and 1% increases in April and March respectively.
CoreLogic Economist Kaytlin Ezzy said the slowdown in the monthly growth rate had contributed to a fall in the annual trend, which dipped below double digits for the first time in 10 months, with rents nationally increasing 9.9% over the 12 months to May.
However, she said this was largely being driven by a slowdown in regional markets, where rents increased 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. 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 increased 0.9% in May compared to a 1.4% lift for units.
CoreLogic’s digital Mapping the Market tool, which now includes rental metrics, showed 44.4% of house and unit markets recorded a rental increase of 10% or more in the year to May. Of the 3,812 markets analysed, 6.7% recorded a decline in rents for the period.
Ms Ezzy said 225 house and 29 unit suburbs had a decline in rent in the past year, the majority located in Canberra and regional areas.
Sydney had 38 markets where rents declined, 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 to see a fall in rents.
“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,” she 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%). More stock means tenants have more choice and potentially more power when negotiating their rent.”
CoreLogic Rental Insights - May 2023
- The gap between median house and unit rents has narrowed to $60/week across the combined capitals and $36/week nationally.
- There were 4,409 additional new rental listings added to the market in May compared to April, nudging total rental supply higher.
- However, new rental listings remain -11.0% below the previous five-year average, and total rental listings remain -33.3% below the long-term average.
- National vacancy rates increased from a record low of 1.1% in April to 1.2% in May.
- Hobart has the highest vacancy rate of 2.7% and largest rental fall of -0.7%, followed by Canberra with a 2.2% vacancy rate and -0.4% decline in rents.
- All remaining capital cities are recording vacancy rates under 1.5%.
- Melbourne recorded the strongest month-on-month change in rents, rising 1.4% in May.
- Since the onset of COVID, capital city rents have risen 25.7% and regional rental values have increased 29.2%, adding the equivalent of $125/week and $116/week to the respective median rent.
Download a copy of CoreLogic's Rental Insights
Meet Kaytlin Ezzy
Economist
As an economist, Kaytlin is a key member within CoreLogic’s research team. Highly efficient and flexible, she specialises in collating large and customised data sets, data visualisation and residential data reports.
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