Premium suburbs seeing massive rent declines
A new report has revealed suburbs across the country with plummeting rental prices.
CoreLogic RP Data has released figures showing beachside suburbs in Sydney and elite suburbs in other states suffered significant declines in advertised weekly rents in the 12 months to April. Tamarama in Sydney saw a 40% decline in median advertised rent for houses, while units fared worst in the Perth suburb of Sorrento, declining by 35.4%.
The report comes following research from CoreLogic showing weekly rents fell 0.5% for capital city houses over the year to April, while rents for units increased a record low 1.2%.
CoreLogic RP Data research analyst Cameron Kusher said a number of factors were contributing to declining rents, including weak wages growth, slowing population growth, a substantial amount of new housing supply and increased investor activity.
“While a drop in rents isn’t ideal for investors, particularly given home value growth is generally slowing, for renters the news is pretty good. It means that they can potentially reduce their housing costs, or find superior accommodation for a similar cost,” Kusher said.
Kusher said premium suburbs had seen the largest falls in advertised rental rates for houses over the past year.
“Whether this is due to fewer executive rents as population growth slows or previous renters taking advantage of record-low interest rates to borrow to purchase is unknown. What is clear is that demand for rental houses is easing, and in a number of suburbs rental prices have fallen dramatically,” Kusher said.
Kusher suggested that landlords may find themselves having to reduce their rents in order to keep tenants.