Yields falling in most capital cities: APM

Yields falling in most capital cities: APM
Yields falling in most capital cities: APM

Capital growth is outstripping increases in rent in most capital cities, with yields falling in Sydney, Melbourne, and Brisbane despite rental growth, according to new report from Australian Property Monitors.

Despite a record high median asking rent of $510 for houses, up 2% from June last year, Sydney’s gross yield for houses dropped 4.6% in the past 12 months. A similar trend was recorded for Sydney units, with 5.3% rental growth for the year against a 5.6% decrease in yields.

Melbourne also saw a decrease in yields despite rental growth, with the median asking rent for houses increasing 5.6% in the last year to $380. The gross yield for houses in the city fell by 2.8% over the same period. While asking rents for units were up 2.8% over the 12 months to June, yields remained static.

In Brisbane, house rents are up 2.6% from last year to $400, while yields have fallen by 1.8%. However, Brisbane’s houses are still showing a higher yield than any other capital city. For units, rents increased by 2.4% over the year, with yields down by 2.8%.

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Falling yields were also recorded in Perth, which has a median asking rent of $460 for houses, and Canberra, which has a median asking rent of $450, with a 5.8% and 5.6% drop respectively. Rents  for houses fell in both those cities over the year.

Despite a 5.8% decrease in rents over the year for houses and a 7.8% fall over the quarter, Darwin recorded 1% yield growth for the year. However, the city’s gross rental yield did fall in the quarter to June by 1%. A markedly different result was recorded in the city’s unit rental market, with the median asking rent is up on a yearly basis by 5.8% but yields down by 4.6%.

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Adelaide’s asking rents increased by 1.5% and 1.8% over the past year for houses and units respectively. Yields for houses were up 2% for the year, while unit yields increased by 4.1% over the same period.

Hobart’s house market showed no rental growth over the past year or quarter, though the median asking rent increased by 4% for the year. Despite the median asking rent for houses remaining unchanged over the year, the city’s houses saw a 4.8% increase in yields, reflecting falling house prices. Gross unit yields were also up for the year, by 3.9%.

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