Rental inflation soft: Pete Wargent

Rental inflation soft: Pete Wargent
Rental inflation soft: Pete Wargent
Delving into the detail behind the Consumer Price Index figures for the third quarter reveals that annual rental price growth in Australia is now tracking at its lowest level since June 1995, with rents up nationally by just +1.5% over the year to September 2015.
 
The data series captured at the capital city level shows the cylical nature of property prices and rents.
 
The national level figures show the marked contrast beteween rental price inflation in periods when investors and housing starts were knocked out of the market (1985-1987) and those where investors have flooded the market with rentals and construction has boomed (2012-date).
 
Rental inflation soft: Pete Wargent
 
Naturally significant variances are evident across the capital cities.

Annual rental growth remained steady in Sydney (+2.5 per cent), but was softer in Melbourne (+2.2 per cent) and Brisbane (+1.1 per cent), while Perth has now slipped into negative territory on this series (-1.6 per cent) after a big run-up through the resources boom. 
 
Rental inflation soft: Pete Wargent
 
Looking at the annualised data reveals the softening trend, particularly in Perth.
 
Rental inflation soft: Pete Wargent
 
 
In the smaller capital cities, Hobart appears likely to play host to a level of rental growth over the year ahead with vacancy rates in the Tasmanian capital having tightened sharply.

On the other hand Darwin has the opposite problem and has now sunk into negative territory, joining Canberra where annual rents have been negative since the first quarter of calendar year 2014.
 
Click to enlarge
Rental inflation soft: Pete Wargent
 
 
Finally, a look at rental growth across 5 and 10 year time periods by capital city shows how the resources capitals enjoyed the bulk of rental growth until the end of the resources boom.
 
Rental inflation soft: Pete Wargent
 
 

PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger.

His latest book is Four Green Houses and a Red Hotel.

Pete Wargent

Pete Wargent

Pete Wargent is the co-founder of BuyersBuyers.com.au, offering affordable homebuying assistance to all Australians, and a best-selling author and blogger.

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Rental market Inflation

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