The supply of housing stock available for rent is climbing, and is likely to keep rising, according to Cameron Kusher, head of research at CoreLogic.
The rates of advertisements for rental properties now indicate that population growth is increasingly being housed in investment properties, says Kusher.
In the year to January 2017, there were 362,708 houses advertised for rent in Australia, an 8.7 per cent increase on the number the previous year, and 287,233 units were advertised for rent, a 9.3 per cent increase on the previous corresponding period.
Rents are growing at historically low levels.
“The rental market is currently seeing historic low rates of rental growth," said Kusher. "With the amount of rental accommodation ramping up, it’s easy to see why."
The latest numbers from rent.com.au, which has one of the broadest databases of rental properties in Australia, show rental growth is stagnant, with February numbers showing rents overall were unchanged across the country. The average metropolitan rent for the eight capital cities remained at $430 per week.
The following table shows the council areas that have recorded the biggest increases in rental advertisements in the last year.
The table shows that Perth councils experienced the heaviest increases in rental advertisements for the year. Kusher says the trend could indicate that WA's sluggish economy is causing people to migrate to other states. Owners could also be renting out properties, rather than selling them into a weak market.
The Perth trend is backed up by numbers from rent.com.au.
Though the numbers of properties available for rent were steady nation-wide, the story is different when you look at the numbers city by city, Greg Bader, CEO of rent.com.au, told SCHWARTZWILLIAMS.
“Overall, we’re not seeing a considerable increase in rental stock – but this is very location-dependent," he said, adding, "there has been in Perth but not in Sydney, for example.”
The table below shows the council areas that have recorded the largest decreases in rental advertisements in the last year.
Only 17 councils recorded decline in rental advertisements over the year.
Despite Sydney's housing construction boom, Kogarah, Warringah and Manly recorded fewer properties advertised for rent.
The areas with less rental stock advertised than a year ago also tend to be more slanted towards regional areas rather than capital cities, said Kusher.
Di Jones Real Estate, which operates in Sydney's highly sought after eastern suburbs and north shore markets, has not seen more rental properties coming onto the market, in fact, it has trouble finding enough properties to keep up with demand, Kylie Walsh, general manager of Di Jones Real Estate, told SCHWARTZWILLIAMS.
"We are seeing no concerning changes occurring in the investment market across the locations our offices service," she said.
"Potential tenants are still prepared to pay above market value for family homes and units or townhouses with terraces and courtyards," she said.
In the Sydney north shore markets Di Jones services supply is particularly tight, said Walsh.
"Over the last two weeks our north shore office has actually had no properties to lease and vacancy in all other locations remains below 2 per cent," said Walsh.
"Our network has not experienced any drop-offs or falls in rental enquiries and average days on market between tenancies has not changed in a two-year period.”
With a record high number of new dwellings still under construction, most of which are units and many of which have been bought by investors to rent, CoreLogic anticipates the number of properties advertised for rent will continue to rise and rental growth is likely to remain low.
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