Australian rents are falling in real terms
Australia’s 2.3 million renters are benefiting from real falls in rents according to a new analysis of CoreLogic rental data by the Property Council of Australia.
“In January and February national real rents have actually fallen for the first time in 20 years of data collection”, said Ken Morrison, Chief Executive of the Property Council of Australia.
“Real rents have been growing at an ever slowing pace since 2010 when they were at the 6 per cent mark. But in January and February average national real rents have fallen. In February, it was -0.1 per cent.
“This is good news for renters and shows the current taxation arrangements are delivering for them.
“Obviously there are a number of dynamics driving this result – low interest rates, additional supply and the economic fortunes of each state and territory – but negative gearing policies are also one factor.
“These numbers highlight once again the economic risks of increasing taxes on property investment by changing negative gearing arrangements.
“It is beholden on those proposing changes to demonstrate what the impact of these would have on real rents, which are now at record lows.
“We are still seeing real growth in rents in Melbourne (2.0 per cent), Sydney (1.3 per cent) and Canberra (1.5 per cent), but rents are falling in Hobart (-0.1 per cent), Adelaide (-0.5 per cent), Brisbane (-0.8 per cent), Perth (-8.5 per cent) and Darwin (-13.4 per cent).
“We are still seeing growth in Sydney rents, however is at its lowest level since 2005.
“Melbourne rents are continuing with growth that is steady and consistent. Real increases in rents have been in the 1 per cent to 2.5 per cent range for four years.
“The end of the mining boom is seeing rents plunge in Perth and Darwin. Both markets had witnessed significant increases in recent years and this is now correcting.
“In Hobart, Adelaide and Brisbane we see small falls in rents. In Brisbane, the trend in rental growth has been falling for three years. In Adelaide and Hobart, the subdued rental market is reflecting broader economic trends.”