CoreLogic Australia’s economist, Kaitlyn Ezzy, reported a recent slowdown in rent increases, a notable shift after a 39.7% surge in rental prices over the past five years. This easing in rent growth is a welcome relief for renters who have seen their weekly rental payments rise significantly during that time.
Nationally, rents have increased by just 7.8% over the past year, marking the smallest annual rise in three years. However, rent growth varied across different cities, with some seeing slight increases, others remaining flat, and a few even experiencing small declines. Ms. Ezzy pointed out that many major cities have hit an affordability limit, forcing tenants to look for other options like shared housing, moving to more affordable areas, or buying their own homes.
Despite this slowdown, renters shouldn’t expect significant relief anytime soon. The ongoing shortage of housing supply continues to push rents higher, though at a slower pace. The challenge of building enough new homes remains a major issue for policymakers, the property industry, and tenants.
Key Insights from CoreLogic’s August Housing Chart Pack:
– Rising Real Estate Value: The total value of residential real estate in Australia reached $10.9 trillion by the end of July.
– Home Values Easing: National home values decreased by 1.7% over the past three months, following a peak increase of 3.3% in the June quarter of 2023.
– Record-High Dwelling Values: Dwelling values in Sydney, Brisbane, Adelaide, and Perth have all reached record highs. Perth led with the highest monthly increase in July at 2.0%, resulting in a substantial annual growth of 24.7%. Brisbane and Adelaide followed with annual increases of 16.0% and 15.5%, respectively.
– Transaction Volumes: Annual home sales appear to have passed their peak, with an estimated 511,211 transactions in the 12 months to July, slightly down from 513,014 in the year to June. However, sales volumes are still 9.3% higher than last year and 5.1% above the five-year average.
– Days on Market: The average time a property stays on the market increased to 33 days in the three months to July, up from 27 days in the three months to April. The longer selling times are mainly driven by slower markets in Sydney, Melbourne, and Hobart.
– Vendor Discounting: Sellers have had to negotiate more to secure sales, with the average vendor discounting rising slightly to 3.7% in July, up from 3.6% in June, reflecting a slowing market.
– New Listings: In the four weeks leading up to August 4, there were 36,973 new property listings nationwide, 1% higher than the same period last year and 7.7% above the five-year average.
– Total Listings: Total property listings remained stable during the typically slow winter season, indicating steady demand. Nationally, 136,135 properties were listed in the four weeks to August 4.
– Regional Variations in Listings: Western Australia, South Australia, and Queensland saw fewer listings compared to last year, which has supported value growth in these regions. In contrast, Victoria and Tasmania experienced an accumulation of listings, contributing to softer market conditions.
– Auction Clearance Rates: The auction clearance rate averaged 64.2% in July, consistent with June’s figures but slightly below the 10-year average of 65.6%.
– Slowing Rent Growth: Rent value growth slowed to 7.8% in the 12 months to July, marking the slowest annual increase in three years as demand in capital cities eased.
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