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For those considering the cost of apartments and houses for rent, there could be good news from the latest official statistics. SQM Research has released data that shows that the national vacancy rate has increased from 2.3 per cent to 2.4 per cent, providing more choices for families across the country. Not only could renters have more options, they could be relatively cheaper too. Cameron Kusher of CoreLogic RP Data reports that the annual growth of rental prices is now at its slowest rate on record.
Rental properties in Sydney, Melbourne and Hobart
It's no secret that real estate in Melbourne and Sydney has been a runaway success recently. SQM Research puts annual growth to 16 June in these two markets at 5.6 per cent and 14 per cent for houses respectively. Price growth for units is only a few percentage points behind in each capital.
However, does the rising cost of houses for sale in these hot markets translate in rising rents? Mr Kusher thinks not. He says that investors in these locations are clearly not targeting high rental yields.
"It appears to be purely a capital growth play and likely to remain this way, at least for the time being."
The yearly change in rental prices as at 31 May sits at 3.1 per cent for Sydney, and houses for rent in Melbourne are 2.3 per cent more expensive, according to CoreLogic RP Data. The vacancy rate in the Victorian capital has moved up 0.1 per cent to 2.3 per cent, while Sydney remains just as tight at 1.8 per cent, as reported by SQM Research.
Hobart is actually the joker in the pack according to the latest data, with the slimmest vacancy rate in the country at 1.5 per cent, while the CoreLogic rental growth index shows a 3.2 per cent rise in rent in the 12 months to 31 May - the highest in the country.
Mild conditions for the rest of the capitals
The other state and territory capitals have all had much more mild results, with CoreLogic showing a 0.1 per cent rise in rents for the combined capitals over May, and a 1.5 per cent increase since the same time in 2014. Rental properties in Brisbane are two per cent more expensive than a year ago and Adelaide recorded a 1.2 per cent rise in the same period. Meanwhile houses for rent in Darwin, Perth and Canberra are actually cheaper.
Vacancy rates are equally encouraging, with a national level of 2.4 per cent, according to SQM Research. Brisbane is on par with this figure, while Perth and Darwin are one and 1.1 per cent higher than the national rate, respectively. Canberra and Adelaide have relatively few vacancies, with just 1.9 per cent of rental properties currently unoccupied.
The overall picture is one of relative stability in the market for rental properties, thankfully giving families a bit of relief in an economy characterised by soft performance and higher-than-desirable unemployment.
Across the capital cities, the average rental price is $488, as reported by Mr Kusher. The rental growth rate of 0.1 per cent in May is the lowest recorded, and with prices rising rapidly, investors are having to suffer lower rates of rental return.
As Australia continues to grapple with issues of housing affordability, it should come as a relief that houses for rent are at a relatively stable cost. Without the cost of rent putting pressure on households, Aussies are able to put more money into other productive parts of the economy, such as business investment and superannuation.
