Media tends to measure markets by movements in

Media tends to measure markets by movements in median prices. But other measures of the health of major markets are worthy of attention, including sales volumes, vacancy rates and movements in rentals.

Rental data is often a forward-looking marker of things to come with prices. Sydney had a couple of years of major rental growth, but little in the way of price growth, before embarking on its price boom from 2013 to 2017. Hobart recorded very low vacancies and the nation’s biggest rental growth before starting the mini-boom on prices that’s still occurring.

So we should keep a close eye on what’s happening with vacancies and rents in the major cities.

The Domain Rental Report for the December 2018 Quarter shows that rents are stronger than sale prices in terms of growth in the past year. Six of the eight capital cities delivered growth in their rentals in 2018, both for houses and for apartments. Recent rental data from SQM Research has similar numbers.

There is, as always, a strong correlation between vacancy rates and rental growth.

The cities with the tightest rental markets, Hobart (0.4% vacancy, according to SQM) and Canberra (0.9%), are the ones with the highest annual growth in their rentals.

Other cities with low vacancies, Adelaide (1.2%) and Melbourne (1.9%), have also recorded solid growth in their rentals.

Two cities where vacancy rates have been high in the recent past but have improved recently – Brisbane (3.0%) and Perth (3.4%) – are also both delivering moderate growth in their rents.

The only cities where rents have fallen in the past year are those where vacancies are trending higher – Sydney (current vacancy rate 3.2%, up from 2.1% a year ago) and Darwin (4.0%, up from 2.8% a year ago).

Sydney house rents have declined annually for the first time in 12 years. Sydney is no longer the nation’s most expensive capital city to rent a house.

Canberra house rents have continued to rise on the back of low vacancies and the national capital is now the most expensive city for house rentals (according to Domain – the SQM Research figures differ on this point).

Brisbane house rents increased annually for the first time in almost three years, helped by improvement in the vacancy rate. This is one of numerous markers suggesting that Brisbane real estate will be stronger in 2019.

Hobart house rents continue to increase, but the rate of growth has slowed. There’s a similar trend with prices and this, combined with a gradual decline in sales activity recently, suggests the mini-boom in the Tasmanian capital has passed its peak. 

Perth house rents have increased annually for the first time in five years. “Coupled with improving yields, the city will become a more attractive option for investors,” says Domain. I tend to agree and note that there are other indicators of improvement in the Perth market, including increased sales activity and elevated prices in the million-dollar suburbs.

In the apartment markets, Sydney unit rents have declined for two consecutive quarters for the first time on record, with rents hitting an almost two-year low, Domain says.

Brisbane unit rents recorded the strongest annual increase in almost three years. I note that Moody’s Analytics is forecasting Brisbane will be a national leader on apartment price growth in the next year or two.

Canberra unit rents experienced the strongest annual growth the city has seen in almost two years, yet another marker of stronger performance in this market, which is underpinned by one of the nation’s best economies and lowest jobless rate.

Overall the rental data, alongside other figures, points to stronger markets this year in Canberra, Brisbane, Perth and Adelaide – and confirms the decline in Sydney, while pointing a gradual wind-down in Hobart’s buoyant market.

Source Terry Ryder

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Removing the Hassle from Sales and Rentals across South East Queensland. Aim to Empower other like minded Property Investors. LJ Gilland Real Estate Pty Ltd LREA推荐书LJ Gilland房地产 L J Gilland Real Estate is a prestigious boutique agency specializing in Property Investment Management Services and the Sales of Investment Properties with tenants in place. Comprised of a top performing group of handpicked specialists, our Agents proudly serve Property Investors in Queensland. Since 1996 our Agency has demonstrated a genuine enjoyment of working with people, developing long-term relationships and delivering on the promise of great service. Carlos and Linda Debello offer property investor's the confidence to sell and lease in any market. We provide comprehensive market appraisals, exclusive multimedia marketing campaigns, and knowledgeable, highly personalized counsel on all aspects of real estate. Our Property Management Team is equally considerate, offering investors with in-depth advise, well-researched rental valuations, and highly professional rental management services. Carlos’ direct mobiles are 0400 833 800 & 0413560808. Linda’s mobiles are 0409995578 & 0414978700 (prefer email contact for Linda). Office 07 3263 6085.
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