The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Untitled design (8)
FULL PROGRAM RELEASED FOR URBANITY-25 CONNECTING PROPERTY LEADERS ACROSS THE ASIA PACIFIC
FULL PROGRAM RELEASED FOR URBANITY-25 WHERE THE PROPERTY INDUSTRY CONNECTS
VIEW FULL AGENDADETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
19
print
Print
ResidentialRenee McKeownWed 29 Jul 20

Regional Areas Take Hold of Rental Market

d2692de5-9bf9-428b-b327-a0979d5c7789

Regional areas have taken a stronger hold of the rental market as Covid-19 sends shock waves through metropolitan vacancies and rental prices.

Capital city rents fell 0.7 per cent in the June quarter compared to a 0.2 per cent increase across regional Australia, according to Corelogic’s quarterly report.

This led to a national drop in rent at 0.5 per cent for the quarter and 0.3 per cent in June.

This adds to data from SQM Research which shows vacancies outside the cities are tightening with the biggest quarterly drops in regional New South Wales, followed by Queensland and Victoria.


Change in rental prices

RegionQuarter12 monthsMedian Rent
National-0.5%0.7%$441
Combined regionals0.2%2.1%$390
Combined Capitals-0.7%0.2%$466
Sydney-1.3%-1.0%$568
Melbourne-1.0%0.0%$453
Brisbane-0.6%0.6%$439

^ Source: CoreLogic 2020 June quarterly rental review

SQM Research’s Louis Christopher said there were strong suggestions regional housing markets were not just stable, they were on the rise.

“This shift isn’t just occurring on the city fringes. It is also happening in areas well outside the cities, ” Christopher said.

“When trolling through our regions, I cannot find one in regional Australia that isn’t recording the same pattern [with a general drop in vacancy] as these ones.”

The exception was Geelong where vacancy increased from 3.0 per cent in December to 4.6 per cent in May and was on the way back down again.

Christopher said he suspected some of the shift to regional areas would be permanent and could lead to other opportunities.

“Obviously there has been an unprecedented and sudden shift towards regional living. No doubt this has been triggered by Covid and the discovery that working remotely is now very achievable for many businesses, especially white collar services, ” Christopher said.

“If there is a more permanent shift to regional living, there will also be employment opportunities, especially in regional centres.

“Australia has long suffered from its economy being anchored to its largest capital cities. Any diversification to the regional centres could very well be a good thing, long-term for this country. ”

Related: Millennials Making Big Move to Regions


Change in rental vacancy

RegionDec 2019 Vacancy RateJune 2020 Vacancy Rate
Sydney CBD4.8%12.7%
Central Coast2.7%1.2%
Wollongong2.6%1.4%
North Coast2.2%1.5%
Central Tablelands2.1%1.3%
Melbourne CBD3.2%6.7%
Geelong3.0%3.5%
Mornington Peninsula1.7%1.1%
Brisbane CBD6.0%9.2%
Beenleigh3.2%1.4%
Ipswich 2.8%1.2%
Northern Brisbane2.0%1.2%

^ Source: SQM Research

Corelogic head of research Eliza Owen said the decline in rent values for metropolitan areas over the quarter came at a time when the rental market was already relatively weak.

“Prior to the fall in rent values over the June quarter, growth in rents had seen some momentum building,” Owen said.

“These signs of rebounding rent values came as investor participation in the market was falling from 2017, and subsequently, the rate of new supply additions in rental properties had been falling.”

However the Covid-19 environment shifted this trajectory.

“Closed international borders created a significant shock to rental demand, as historically the majority of new migrants to Australia have been renters,” Owen said.

“Furthermore, job losses in sectors such as hospitality, tourism and the arts, which ABS payroll data estimates has been around 20 per cent, have also impacted demand, because households in these sectors are more likely to rent than in other industries.”

ResidentialAustraliaReal EstatePlanningPlanningSector
AUTHOR
Renee McKeown
More articles by this author
ADVERTISEMENT
TOP STORIES
Exclusive

Paperwork to Plate: The Rise of Brisbane’s Midtown

Taryn Paris
6 Min
Wel Co's Thornhill Park, 40km west of the Melbourne CBD.
Exclusive

Waiting for Victoria: Why Wel.Co says State Planning isn’t Working

Marisa Wikramanayake
6 Min
Woods Bagot Principal Alex Hall and Penny Place Adelaide
Exclusive

Amplified Affordability: Woods Bagot Cracks Housing Cost Code

Leon Della Bosca
8 Min
Goodman Brisbane Industrial EDM
Exclusive

Olympics a ‘Springboard’ for Brisbane’s Industrial Age

Clare Burnett
6 Min
Colliers build-to-rent head Robert Papaleo speaking at The Urban Developer's Build-to-Rent Summit in Melbourne.
Exclusive

Get Creative Before BtR Wellspring Runs Dry, Sector Urged

Marisa Wikramanayake
4 Min
View All >
Exclusive

Paperwork to Plate: The Rise of Brisbane’s Midtown

Taryn Paris
Mandarin Centre EDM
Retail

Decade On, Mandarin Centre Redevelopment Revealed

Clare Burnett
Build-to-Rent

The 10 Biggest BtR Projects Under Construction in 2025

Editorial Desk
As the asset class matures, The Urban Developer reveals the 10 biggest build-to-rent projects (by asset value) under con…
LATEST
Exclusive

Paperwork to Plate: The Rise of Brisbane’s Midtown

Taryn Paris
6 Min
Mandarin Centre EDM
Retail

Decade On, Mandarin Centre Redevelopment Revealed

Clare Burnett
4 Min
Build-to-Rent

The 10 Biggest BtR Projects Under Construction in 2025

Editorial Desk
5 Min
Finance

Global Uncertainty Underwrites Australia as ‘Island of Stability’ for Investors

Taryn Paris
6 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/regional-areas-take-hold-of-rental-market