Rents surged 0.5 per cent higher over the month to January after record house price growth into the first quarter of 2020, according to Corelogic’s latest quarterly report.
The national median rental value went up to $440 a week following the rise in property prices in June 2019, and a decline of new dwelling construction in most capital cities.
Corelogic head of research Eliza Owen said this was the highest monthly growth rate in the national rental index since January 2018.
“It is clear that the rental market is starting to gain momentum again as the investment properties from the previous upswing are absorbed, and new development levels have moderated,” Owen said.
“This means tenants can expect higher rents in most capital cities.
“Hobart presents a continued crisis in the rental market, with the strongest growth in rents, a tight level of vacancy, and a growing short term rental accommodation market crowding out long-term tenants.”
The Corelogic hedonic rental index has been in an upswing since September 2019.
The difference between capital city and combined regional rents narrowed against high levels of new supply in capital city regions, which slowed rental growth.
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Owen said that the lack of supply was starting to tighten rental markets in capital cities however this dynamic could change over 2020.
The report showed over the month, Sydney, Canberra and Hobart saw the fastest rental increases (each rising 0.7pc), followed by Adelaide (0.6pc), Perth (0.5pc) and Melbourne and Darwin (0.4pc).
Brisbane experienced the slowest rental growth over the month, at 0.3 per cent; despite the relatively low growth in the dwelling rental index in Brisbane over the month, it was the highest monthly result for Brisbane in a year.
Sydney was the most expensive city for rentals with a median dwelling rental value in January 2020 of $574 a week even with downward pressure on rents from high levels of property investment during the 2012-17 upswing.
Year-on-year, Sydney rent values fell, but the rate of decline was shrinking.
Median rents across Canberra came in only $18 lower than Sydney, making it the second most expensive market to rent a home across the nation.