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Rental conditions slowdown
Released 12 July 2011

The RP Data June quarter Rent Report has confirmed that while rental rates increased by 2.9 per cent for the past 12 months, the combined capital city results showed a slowdown in market conditions.    

RP Data Research Analyst Cameron Kusher said despite the quarterly slowdown in rental growth, the lack of first home buyers and limited new supply of housing may create increased competition.

“This activity may be beneficial to investors who could see a boost in rental rates as vacancies tighten and fewer new dwellings continue to commence construction.

According to the results, rental growth has tracked below average over the past 12 months; a trend which Kusher believes has been evident since early 2008 as rental demand started to slow.

“Combined capital cities rents increased by 2.7 per cent over the year which is below the inflationary figures to March 2011.

Nationally, rental growth has actually been slightly higher over the year, with rents increasing by 2.9 per cent which is likely a result ofthe most recent quarterly results,” Kusher said.

As a comparison, over the last five years, capital city rents increased at an average annual rate of 7.0 per cent for houses and 7.9 per cent for units.

Kusher said that this result is an indication that rental demand for units has been much stronger than houses.

“The result reflects changing lifestyle patterns and the ongoing densification of inner city areas and subsequent increasing demand for rental units in these regions,” he said.