Sydney, Melbourne gross unit rental yields teetering on fall: CoreLogic RP Data

Sydney, Melbourne gross unit rental yields teetering on fall: CoreLogic RP Data
Sydney, Melbourne gross unit rental yields teetering on fall: CoreLogic RP Data

Gross unit rental yields across Sydney and Melbourne are teetering on heading to new record lows, according to new research.

The CoreLogic RP Data Hedonic Home Value Index named Hobart as the only capital city over the last 12 months where rental growth kept up with value growth.

CoreLogic RP Data’s head of research Tim Lawless said capital city rents increased by just 0.9% over the past twelve months, the slowest pace on record.

"A lack of any meaningful rental growth at a time when dwelling values are rising by more than 11% over the year has pushed gross rental yields to new record lows across the combined capital city measure," Mr Lawless said. 

“When you consider that Sydney rents have increased by just 2.5% over the past twelve months while values have climbed 18.4 per cent higher, it is easy to see how yields are getting squashed.

“With value growth once again accelerating across Sydney and Melbourne, the market evolution in mortgage lending policies will will provide a timely test for housing demand, particularly from investors. The combined effect of tighter lending parameters with more focus on serviceability and low LVR’s, potentially higher mortgage rates for investment loans as well as limitations on the pace of investment lending imposed by APRA on Australia’s banks should conspire to slow investor demand in the market."

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Sydney, Melbourne gross unit rental yields teetering on fall: CoreLogic RP Data 

 

Michael Crawford

Michael Crawford

Michael is the real estate reporter for western Sydney and loves writing about homes and the people who live in them. A former production editor and news journalist, he enjoys writing about real-world property purchases as well as aspirational buys and builds. Following a recent move from Sydney’s northern beaches, Michael now actually enjoys commuting.

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Rental Yield Value Growth

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