Decade High Annual Growth In National Rents
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Decade High Annual Growth In National Rents

Although there are signs the sector is slowing in some markets.

By Kanebridge News
Mon, Jul 19, 2021 12:08pmGrey Clock < 1 min

There is seemingly little reprieve across the residential market for both home buyers and renters according to the latest report by CoreLogic.

In the CoreLogic Rent Review for June 2021 quarter, the national rental rates are 6.6% higher than they were last year – enjoying the highest annual growth in dwelling rents since January 2009.

CoreLogic’s national rent index recorded a 2.1% rise in the three months to June 2021, down on the 3.2% rise over the March quarter.

National gross rental yields were recorded at 3.41% in the June quarter – down from 3.55% over the March quarter and 3.73% the year earlier – proving the results are slowing.

Outside of the nation’s capital, regional rents are rising at an unprecedented level rising by 2.7% in quarter two, compared to a 1.9% rise in capital city rents – down quarter-on-quarter.

While the above indicates easing growth in recent months, regional Australia’s annual rental growth hit 11.3% in June 2021 – the highest annual growth result on record, with CoreLogic’s rental index commencing in 2005.

“Following subdued rental performance through much of the 2010s, the Australian rental market has seen an increase in values due to many of the same factors that have led to the current housing price upswing,” said CoreLogic’s Head of Research Australia, Eliza Owen.

“These factors include increased government stimulus through COVID-19, accumulated household savings through lockdown periods, the swift economic recovery seen as restrictions eased, and a lack of rental supply in some markets have also exacerbated rental price increases, particularly in major centres of regional Australia.”

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Amid looming rate rises, there are reasons to be cheerful as mortgage holders head into 2023

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Mon, Feb 6, 2023 2 min

Mortgage holders should brace themselves for more pain as the Reserve Bank of Australia board prepares to meet tomorrow for the first time this year.

Most economists and the major banks are predicting a rise of 25 basis points will be announced, although the Commonwealth Bank suggests that the RBA may take the unusual step of a 40 basis point rise to bring the interest rate up to a more conventional 3.5 percent. This would allow the RBA to step back from further rate rises for the next few months as it assesses the impact of tightening monetary policy on the economy.

The decision by the RBA board to make consecutive rate rises since April last year is an attempt to wrestle inflation down to a more manageable 3 or 4 percent. The Australian Bureau of Statistics reports that the inflation rate rose to 7.8 percent over the December quarter, the highest it has been since 1990, reflected in higher prices for food, fuel and construction.

Higher interest rates have coincided with falling home values, which Ray White chief economist Nerida Conisbee says are down 6.1 percent in capital cities since peaking in March 2022. The pain has been greatest in Sydney, where prices have dropped 10.8 percent since February last year. Melbourne and Canberra recorded similar, albeit smaller falls, while capitals like Adelaide, which saw property prices fall 1.8 percent, are less affected.

Although prices may continue to decline, Ms Conisbee (below) said there are signs the pace is slowing and that inflation has peaked.

“December inflation came in at 7.8 per cent with construction, travel and electricity costs being the biggest drivers. It is likely that we are now at peak,” Ms Conisbee said. 

“Many of the drivers of high prices are starting to be resolved. Shipping costs are now down almost 90 per cent from their October 2021 peak (as measured by the Baltic Dry Index), while crude oil prices have almost halved from March 2022. China is back open and international migration has started up again. 

“Even construction costs look like they are close to plateau. Importantly, US inflation has pulled back from its peak of 9.1 per cent in June to 6.5 per cent in December, with many of the drivers of inflation in this country similar to Australia.”

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