The median rental rate for houses in Tamarama fell a whopping 40.0% in the 12 months to the end of April, according to CoreLogic's weekly Property Pulse report.
Rents in the exclusive Perth suburb of Sorrento also took a dive, falling 35.4%.
Combined capital city weekly rents fell 0.2% during the year.
Weekly rents fell -0.5% for capital city houses over the period, while unit rents increased by a record-low 1.2%, according to CoreLogic RP Data’s Monthly Rental Report for April 2016.
New housing supply, slowing population growth, weak wages growth and increased purchasing by investors are contributing to the lower rents, said CoreLogic’s research analyst Cameron Kusher.
Kusher said that with record-high numbers of new units currently under construction, and census data showing that units are more than twice as likely to be rented than houses, “Much of the new housing supply under construction is ultimately likely to end up as rental accommodation.”
“While a drop in rents isn’t ideal for investors,” said Kusher, “particularly given home value growth is generally slowing, for renters the news is pretty good.” He said now is a good time for renters to reduce their housing costs, or find better accommodation for the same cost.
In explaining why rents in premium suburbs have been hit the hardest, Kusher said, “Whether this is due to fewer executive rents as population growth slows or previous renters taking advantage of record-low interest rates to borrow to purchase is unknown.”