Good news for renters! Darwin, Perth, Brisbane and Adelaide rental growth declines
There’s been a longstanding debate in the property world - to buy or rent. Recent research from CoreLogic RP Data might make the latter more appealing, as growth in the rental market has declined over the past twelve months in the cities of Darwin (-13.40%), Perth (-8.6%), Brisbane (-0.7%) and Adelaide (-0.4%).
However, renters in Sydney and Melbourne haven’t fared so well, with the data showing an increase of 1.4% and 2.1% respectively.
Overall, this is the weakest rental market conditions seen by CoreLogic RP Data since its rental series began in 1996.
“In fact there hasn’t previously been a twelve month period when rents didn’t rise across our combined capitals index,” CoreLogic RP Data head of research Tim Lawless said.
“With dwelling values rising substantially more than rents in Sydney and Melbourne, this ongoing effect has created a compression in gross rental yields to the extent that gross yields in these cities are now only marginally higher than record lows.”
The rate of investor borrowing has also fallen, which Lawless explained could be attributed to several factors, including higher mortgage rates for investment loans, stricter lending criteria and the low rental yield environment.
While the data showed a significant dip in rental yields across many of Australia’s major cities over the past 12 months, Lawless said we are still yet to have a proper gauge “on how the overall housing market is performing in the New Year.”
He also reminded investors, that January is typically a quiet month across the housing market.
“Additionally, while the number of auctions won’t return to normal until early February, the weighted average auction clearance rate across the capital cities over the final weekend of January was 61.6%; higher than what was recorded during December when the weighted average clearance rate was between 57% and 59% from week to week."
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