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The May CoreLogic RP Data monthly rental review out today confirms that over the past month, rental rates increased at their slowest pace on record. “Good news for those looking to rent,” says report author Cameron Kusher.
Sydney and Hobart have seen the strongest rental growth over the past year which, according to Mr Kusher, indicates a disconnect between demand and supply. “Sydney stands out as seeing strong population growth which is creating more demand for accommodation in the city,” he said.
Although Sydney and Melbourne recorded low rental yields, Mr Kusher said that investors in these two cities are clearly not targeting rental returns. “It appears to be purely a capital growth play and likely to remain this way, at least for the time being,” he said.
For a more balanced approach to property investment, Mr Kusher recommends investors look to markets like Brisbane or Adelaide which currently appear to be more financially attractive, however buyers should not expect value growth to match that of Sydney or Melbourne any time soon.
Index results as at May 31, 2015
Sydney and Hobart recorded the greatest annual increases in weekly rents while rents in Perth, Darwin and Canberra have dropped by -4.5%, -5.5% and -0.6% respectively.
Rents are now rising at their slowest annual rate on record across the individual capital cities over the past year, Sydney and Hobart have recorded the greatest increases in weekly rents.
According to Mr Kusher, the annual rate of rental growth is now the slowest on record. He said the sluggish rental appreciation can likely be attributed to the ongoing boom in dwelling construction across Australia’s capital cities accompanied by record high participation in the housing market from investors.
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