Record low yields for Sydney and Melbourne: CoreLogic

Rental markets continued to run soft, with capital city rents falling a further -1.1 percent over the past three months to be -0.5 percent lower over the year.

 

The weakest rental conditions are being experienced in Darwin and Perth, where dwelling rents fell by -9.4 percent and -14.1 percent respectively over the past twelve months.

 

Most of the capitals recorded rental falls over the year, however rents have shown some subtle growth in Melbourne, Canberra and Hobart.

 

The gross rental yield profile in Sydney and Melbourne has once again pushed to a new record low in August.

 

Sydney and Melbourne have each recorded the lowest gross rental yields across the capitals for houses at 2.8 percent, both of which are record lows for the cities.

 

Gross rental yields on units tend to be higher compared with houses, however the gross yield for attached housing product is also at a record low, averaging 4.1 percent across the capital cities and ranging from 3.9 percent in Sydney to 5.4 percent in Hobart.

 

Mr Lawless said, “The disparity in the performance of housing markets across the capital cities and from region-to-region highlights the diverse economic and demographic factors around the country. “Such diversity, not only regionally, but also across housing types, makes reading the housing market more challenging than ever.

 

"Complicating this is the fact that a record amount of new housing construction is under way, with more in the pipeline.

 

“With so much new supply being delivered to the market in the form of units, we are already seeing significantly slower growth rates for units compared to houses in a number of cities.

 

"As these unit projects come to completion and ultimately settlement, the underperformance of new unit stock could create headwinds for the market in certain geographies.”