Sluggish rental growth across all cities

Sluggish rental growth across all citiesDarwin, Perth and Canberra are the biggest capital city residential rental market losers, according to CoreLogic RP Data’s April Rental Review.Across the combined capital cities, rental rates increased by 0.1 per cent in April and continue to rise at their slowest annual pace in more than a decade.Rents have dropped by 4.7 per cent in Darwin, 4.2 per cent in Perth and 2.6 per cent in Canberra in the last year.Combined capital cities rental rates stood at $487 per week, rising by just 0.1 per cent over the month, 0.7 per cent over the quarter and 1.7 per cent over the past yearAccording to RP Data research analyst Cameron Kusher, annual rental growth across the country has been at 1.7 per cent for four consecutive months – a level not experienced since June 2003. Yields also continue to diminish as growth in dwelling values outpaces rents.Kusher attributes the slow rental appreciation to the booming level of dwelling construction coupled with high levels of buying activity from the investment segment. This is “adding additional rental stock to the market and curtailing rental increases,” he says.Sydney and Hobart recorded the greatest increases in weekly rents over the past year, at 3.3 per cent and 3.2 per cent respectively.”The ten year average annual rate of rental growth is higher than the current growth rate in each capital city,” Kusher says, adding that increasing residential construction activity, particularly for inner city units, may result in even lower rates of rental growth over the coming months.”This is likely to be most evident in the markets where new unit supply is surging, being Melbourne and Brisbane and to a lesser extent Sydney.”To read the report click here.