{"id":848,"date":"2021-10-27T05:10:14","date_gmt":"2021-10-27T05:10:14","guid":{"rendered":"https:\/\/royabhishek.in\/urbanbuyer\/rental-yields-still-shrinking-despite-dramatic-rise-in-rents\/"},"modified":"2021-10-27T05:10:14","modified_gmt":"2021-10-27T05:10:14","slug":"rental-yields-still-shrinking-despite-dramatic-rise-in-rents","status":"publish","type":"post","link":"https:\/\/royabhishek.in\/urbanbuyer\/rental-yields-still-shrinking-despite-dramatic-rise-in-rents\/","title":{"rendered":"Rental yields still shrinking despite “dramatic” rise in rents"},"content":{"rendered":"

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\"An<\/p>\n

An anaemic supply of rental homes has resulted in a “dramatic” annual increase in rents in September.<\/p>\n

According to CoreLogic, the national median rent grew by 8.9% on an annual basis, the highest rate since July 2008.<\/p>\n

On a quarterly basis, the growth in rents in September was slightly lower compared to the previous period, up by only 1.9% versus the 2.1% recorded in over the June quarter.<\/p>\n

Despite this gain in rents, rental yields are on a downtrend.<\/p>\n

In fact, national rental yields have been declining on a monthly basis since October last year, with the latest one hitting 3.29%.<\/p>\n

This downtrend was apparent across capital cities and regional markets.<\/p>\n

Combined gross rental yields declined to 3.02% for capital cities and 4.35% in regional cities.<\/p>\n

The compression in rental yields despite the increase in rents can be attributed to the gains in dwelling values.<\/p>\n

While national rents grew by 1.9% during the quarter, dwelling values rose at a significantly faster pace at 4.8%.<\/p>\n

Still, Australia and most of its capital cities’ rental yields remain in the healthy range of 3% to 5%.<\/p>\n

That was not the case, however, for Sydney and Melbourne, where respective rental yields were at 2.45% and 2.76% in September.<\/p>\n

Here’s a breakdown of gross rental yields across capital cities and dwelling type:<\/p>\n

\"That<\/p>\n

Rents growing faster in regional markets<\/h2>\n

Regional markets outpaced capital cities both in terms of monthly and annual gains in rent.<\/p>\n

Over the month, the combined growth in rents rose by 1.7% for capital cities and 2.2% for regional markets.<\/p>\n

The difference was more significant on an annual basis \u2014 regional rents grew by 12.5% while capital city rents only increased by 7.5%.<\/p>\n

Brisbane and Sydney recorded the highest quarterly growth in rents among capital cities at 2.6% and 2.3%, respectively.<\/p>\n

Despite the gains, Adelaide<\/a> remained the cheapest capital city for rents at $440 per week.<\/p>\n

On the other hand, Canberra maintained its status as the most expensive market where homes rent for a median of $633 weekly.<\/p>\n

\"Regional<\/p>\n

Factors influencing growth in rents<\/h2>\n

CoreLogic research director Tim Lawless said the growth in rents could be attributed to several factors, including the increasing desire for detached housing and the lack of supply.<\/p>\n

\u201cRenters are clearly looking for lower density housing options, with house rents rising at more than double the pace of units rents over the past year,\u201d he said.<\/p>\n

However, it is worth noting that the trend is starting to narrow, with national house and unit rents rising at the same rate over the September quarter at 1.9%.<\/p>\n

\u201cAnother factor that may be contributing to rental demand is that more renters are working from home, which could be driving a trend towards smaller rental households as tenants look to maximise their space and working environment during COVID,\u201d Mr Lawless said.<\/p>\n

\u2014<\/p>\n

Photo by CHUTTERSNAP on Unsplash.<\/p>\n<\/p><\/div>\n


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