An increase in supply of rental accommodation could be behind the sluggish results in September, according to the latest report from CoreLogic.

The September 2019 Quaterly Rental Review found that national rents were -0.1 per cent lower in September with a median rental value of $436 per week.

Capital city rents are -0.5 per cent lower over the quarter and 0.1 per cent higher year-on-year while regional market rents climbed 0.3 per cent higher over the quarter to be 2.3 per cent higher over the past year.

Nationally, rents have continued to trend lower over each of the last three months after the June results saw rents unchanged over the month.

At a glance:

• National rents down -0.1 per cent over September and down -0.3 per cent on a quarterly basis
• Hobart becomes more expensive to rent in than Melbourne with a current median rental value of $464 per week
• Gross rental yields are currently recorded at 3.99 per cent nationally compared to 4.14 per cent at the end of the previous quarter and 3.85 per cent a year ago

Rental rates across the combined capital cities came in -0.2 per cent lower over the month with a weekly median rental value of $464 per week which remains considerably higher than the combined regional markets where the median rental value current sits at $381 per week, with rents across regional areas having risen by 0.1 per cent over the month of September 2019.

According to the report, Adelaide was the only capital city to record a monthly rise in rents (+0.1 per cent), with rental rates lower in Sydney (-0.3 per cent), Melbourne (-0.1 per cent), Perth (-0.1 per cent), Hobart (-0.2 per cent), Darwin (-0.2 per cent) and Canberra (-0.3 per cent), while unchanged in Brisbane.

CoreLogic’s head of research Tim Lawless said the broad-based weakness in rental conditions could probably be attributed to a rise in rental supply following the surge in investment and residential construction activity through the previous housing boom which has contributed to rental supply.

“Additionally, as first home buyer numbers have surged, this has likely contributed to a reduction in demand as renters convert to buyers,” Lawless said.

“Markets where rents are rising the fastest have generally seen less of a supply response, creating tight rental conditions and pushing rents higher.” 

Key findings:

• National rents were -0.1 per cent lower over the month to September 2019, and down -0.3 per cent on a quarterly basis, however 0.7 per cent higher over the year.
• Capital city rents are -0.5 per cent lower over the quarter and 0.1 per cent higher year-on-year while regional market rents are 0.3% higher over the quarter to be 2.3 per cent higher over the past 12 months.
• Adelaide was the only capital city to record a month on month rise in rents in September 2019, with rents lower monthly across the remaining capital cities, apart from Brisbane where rents were steady.
• In September 2019, Hobart became more expensive to rent a property than Melbourne, with a current median rental value of $464/week (the third highest median rent amongst the capitals, after Sydney ($571/week) and Canberra ($538/week). 
• Across the individual capital cities, annual rental growth was positive across all cities except Sydney (-2.2 per cent) and Darwin (-2.7 per cent). 
• Gross rental yields are currently recorded at 3.99 per cent nationally compared to 4.14 per cent at the end of the previous quarter and 3.85 per cent a year ago.
• Gross rental yields remain higher relative to the same time last year across all of the individual capital cities, apart from Sydney and Canberra where yields are level relative to last year.

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