Property market: Median rent prices take a hit in major cities
The situation for renters across Australia continues to ease, with new data from CoreLogic showing rents steadily declining.
According to the property research firm, national rent values fell 0.3% in June, and 0.5% over the June quarter. CoreLogic notes this was the largest quarterly decrease in rents since September 2018, and the downward trend is likely to continue in the coming months.
Capital cities saw the greatest declines, with rents dropping 0.7% over the June quarter. In comparison, rents across regional Australia have been remarkably resilient, increasing by 0.2% over the same period.
“Closed international borders created a significant shock to rental demand, as historically the majority of new migrants to Australia have been renters,” said Eliza Owen, head of research Australia at CoreLogic.
“Furthermore, job losses in sectors such as hospitality, tourism and the arts, which ABS payroll data estimates has been around 20%, have also impacted demand, because households in these sectors are more likely to rent than in other industries.”
Before the coronavirus pandemic struck, growth in the rental market was fairly subdued, with national rents lifting just 1.1% in the five years to June 2020. This has been good news for renters but unwelcome news for property owners.
While there were faint signs that rents would rebound earlier in the year - after a decline in investor participation saw the supply of new rental properties taper off - the coronavirus pandemic has tilted the playing field decidedly in tenants’ favour.
Among major markets, Hobart recorded the steepest drop in rental values, with median rents falling by 2.3%. Sydney saw the second largest decline at 1.3%.
Asking rents have also pulled back slightly as owners try to attract tenants. In Sydney, estimated median asking rents decreased by 1.6% to $568 per week. Canberra asking rents, which fell by 1.7%, currently sit at $566.
In third place, Hobart has a median asking price of $454 a week, followed by Melbourne at $453, Darwin at $442, Brisbane at $439, Adelaide at $397, and Perth at $396.
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