(Australian Associated Press)
National rental rates are edging higher and rental yields are following suit, but rents are growing at a slower pace than last year, as the overall housing market softens.
Weekly rents across Australia rose 0.3 per cent in March and are 1.1 per cent higher since the beginning of the year, according to a quarterly measurement of median rental prices from data analytics firm CoreLogic.
The cost of renting is now 2.2 per cent more than it was in March 2017.
Unsurprisingly, the most expensive city to rent is Sydney, where the median weekly rent is $582.
Over the first three months of 2018 rents are up 0.5 per cent, the weakest first quarter of rental growth in the harbour city since 2009.
CoreLogic researcher Cameron Kusher said considering that the first quarter is usually a stronger season for rental growth, in most capital cities the rental market has markedly softened.
“Although values are still rising they are doing so at a slower rate than they have over recent first quarters of the year,” Mr Kusher said.
Capital city rents are 1.0 per cent higher over the quarter and 1.9 per cent higher year-on-year while regional market rents are 1.2 per cent higher over the quarter to be 3.1 per cent higher over the past 12 months.
Darwin was the only capital city where quarterly rents fell, down 0.3 per cent, while rents lifted 1.2 per cent in Melbourne, 1.1 per cent in Brisbane, 1.0 per cent in Adelaide, 1.7 per cent in Perth and 2.3 per cent in Canberra.
Rents were up 5.0 per cent in Hobart in the first three months of the year, the strongest quarterly rise since measurements began in 2009.
Mr Kusher said investors are most active in NSW and Victoria and are targeting capital growth rather than rental return.
He said new housing supply additions and slowing rental growth means investors need to find ways to differentiate.
“Whether that is on rental cost or by renovation, we would expect that competition for tenants in most capital cities will increase,” Mr Kusher said.
With slow but positive rental growth combining with falling home values over the first quarter, rental yields have firmed in all capital cities except Darwin.
CAPITAL CITY RENTS FIRST QUARTER 2018
SYDNEY: $601/week for houses, $562/week for units
MELBOURNE: $448/wk for houses, $431/wk for units
BRISBANE: $449/wk for houses, $399/wk for units
ADELAIDE: $382/wk for houses, $316/wk for units
PERTH: $389/wk for houses, $341/wk for units
HOBART: $422/wk for houses, $350/wk for units
DARWIN: $511/wk for houses, $404/wk for units
CANBERRA: $573/wk for houses, $459/wk for units