Dwelling rents up but growth to slow

Dwelling rents up, but growth to slowHouse and unit rental rates increased nationally in the first quarter of 2015 but are expected to slow, according to CoreLogic RP Data research.National house and unit rental rates increased in the year’s first quarter, but growth is expected to slow as new housing supply enters the market, according to researcher CoreLogic RP Data.The group’s first 2015 ‘Quarterly Rental Review’ report shows median rent for both houses and units increased by 1.3 per cent over the three months to the end of March. The median rent for houses is now $400 nationally ($435 for capital cities) while the median rent for units is $390 ($415 for capital cities).The strongest performers in the house rental market over the quarter were Melbourne (median rent rose 1.3 per cent for the quarter), Canberra (up 1.1 per cent) and Sydney (up 1.0 per cent), while the remaining capitals recorded 0 per cent or negative growth.Some unit rental markets performed better over the period, with Melbourne (up 2.8 per cent), Canberra (up 2.6 per cent) and Sydney (up 1.0 per cent) recording positive increases but the remaining capitals posting stable or declining rents.”Given the softer conditions recorded across the capital city rental market towards the end of 2014, rental growth over the first quarter of 2015 has been relatively strong at a capital city level,” said CoreLogic RP Data research analyst and report author Cameron Kusher.Year-on-year, houses have performed better than units, recording a median rental increase of 2.6 per cent in the 12 months to the end of March 2015. The strongest performer was Hobart with an increase of 6.1 per cent, followed by Sydney (up 3.9 per cent) and Adelaide (up 2.9 per cent).Annual increases in the unit rental market were lower; the national market rose by 1.3 per cent year-on-year, with the leading performers being Sydney (2.0 per cent rise) and Melbourne (up 1.4 per cent). All other capitals recorded either a 0 per cent increase or negative growth.The capitals most influenced by the resources sector, Perth and Darwin, have been struck by negative demand over the past year, with both houses and units recording rental growth between -5.3 and -5.6 per cent (with the exception of Darwin’s house rental market, which posted growth of -3.1 per cent).”With new housing supply increasing and investor purchasing at record highs, we have seen a significant slowdown in the rate of rental growth over the past couple of years, and we expect this trend to continue over the coming year,” Kusher said.