Rents across regional Australia surged by 11.3 per cent in the year ending June 2021, the highest annual growth figure since data firm CoreLogic began records in 2005.
Increases were most pronounced in Tasmania’s South East region, including Bicheno, Bruny Island and Huonville, with combined rents for houses and units increasing a whopping 23.7 per cent to $430 per week.
The Richmond-Tweed region, home to well-known lifestyle enclaves like Ballina, Byron Bay and Lismore recorded regional NSW’s highest increase, with combined rents rising by 19.0 per cent over the 12 month period to $620 per week.
Immediately south to Richmond-Tweed, the Coffs Harbour-Grafton region recorded combined rental growth of 16.7 per cent to $525 per week.
In the Southern Highlands-Shoalhaven region, which includes Nowra, Berry and Mittagong, rents rose 15.8 per cent to $549 per week.
Rental growth in capital cities and regions slowed during the latest quarter. Source: CoreLogic
CoreLogic’s Head of Research Australia, Eliza Owen said that regional Australia had been suffering from low levels of rental stock, likely contributing to an increase in prices.
“In regional Australia in particular, these demand dynamics have been exacerbated by particularly low levels of stock. In the three months to June 2021, CoreLogic counted just under 100,000 rental listings across regional Australia, 34.4 per cent lower than what was observed in the same quarter last year. The low levels of stock may be a result of less people leaving regional Australia since the onset of COVID, which could have seen lower turnover of regional rental properties,” Ms Owen said.
Darwin and Perth led capital city rent growth, with rents increasing 21.8 per cent and 16.7 per cent respectively.
Canberra is the most expensive capital city in which to rent, according to CoreLogic, with a house typically costing $668 per week and units $521 per week.
Regional rents continued to outpace capital city rents in the most recent quarter, though there are signs that both markets may be slowing, according to Ms Owen.
Regional rents increased by 2.7 per cent during the quarter compared to a 1.9 per cent for capital cities, both down on the previous quarter.
This was likely due to increased investor activity, which had a direct impact on the amount of rental stock being added to the market.
“It is interesting to note that, as with house prices, rent prices are seeing a deceleration in growth at the national level and across each of the capital cities. This may reflect affordability constraints, but there could also be higher levels of rental supply as investor activity in the market increases,” Ms Owen said.
ABS data showed a 13.3 per cent increase in new finance to property investors over the month of May.
“Overall, I think we can expect a similar outcome for the Australian rental market as the purchasing market. Very high rental growth is unsustainable while income growth remains subdued. The result will likely be more subdued growth rates in the coming quarters, especially as investor participation trends higher, delivering more rental supply,” Ms Owen said.