Real falls in residential rents 

Australia’s 2.3 million renters are benefiting from real falls in residential rents, according to fresh analysis of CoreLogic rental data by the Property Council of Australia.

The January 2016 CoreLogic RP Data Rental Review, released in February, recorded no growth over the previous 12 months.

CoreLogic has tracked annual rental changes since 1996, finding national real rents have fallen for the first time in 20 years.

The growth in real rents has slowed from six per cent in 2010 to -0.1 per cent in February 2016.

Property Council chief executive Ken Morrison says this is “good news” for renters and demonstrates that current taxation arrangements are working.

“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,” Morrison says.

“These numbers highlight once again the economic risks of increasing taxes on property investment by changing negative gearing arrangements,” Morrison adds, calling on those proposing changes to taxation arrangements to demonstrate the impact this would have on real rents.

While growth in real rents has been recorded in Melbourne (2.0 per cent), Sydney (1.3 per cent) and Canberra (1.5 per cent), 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).

Morrison says Sydney rents remain at their lowest level since 2005, while Melbourne’s rent increases have been within the one to 2.5 per cent range for the last four years.

“The end of the mining boom has seen rents plunge in Perth and Darwin. Both markets 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,” Morrison says.

The national average weekly rent now stands at $487 for a house, and $465 for a unit.