Housing rents rising at fastest rate since 2007, units continue to suffer

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on April 27, 2021
Housing rents rising at fastest rate since 2007, units continue to suffer

National rental rates rose 3.2% in the March 2021 quarter according to CoreLogic, the largest quarterly increase in almost 14 years.

Regional areas drove much of the growth, with rents rising 4.1% across the combined regional markets compared to capital city growth of 2.9%. 

Regional unit and house rents were up 4.8% and 4.0% in the quarter respectively, while capital city unit and house rents were up 2.0% and 3.3% each. 

Houses and units in Darwin showed the strongest growth in rental rates over the quarter, with houses rising 8.2% and units rising 7.0%. 


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers. 

Lender

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
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Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
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Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

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  • Use the app to get loan insights to help you pay off your home loan faster
Variable
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100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.
  • No upfront or ongoing fees
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NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.

Variable Home Loan (Principal and Interest)

  • No upfront or ongoing fees
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  • Extra repayments + redraw services

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 18, 2022. View disclaimer.


CoreLogic’s Research Director Tim Lawless said the strong growth hid the massive diversity in rental conditions across the country. 

"At one end of the spectrum we have Perth and Darwin where annual rental growth is well into double digits and accelerating," Mr Lawless said.

"At the other end is Melbourne and Sydney where rents are down over the year." 

Rental affordability has shrunk in Canberra, with the ACT capital currently the most expensive city to rent a house or unit at $612 per week and $513 per week, respectively. 

National gross rental yields were recorded at 3.55%, down from 3.71% over the December quarter and 3.76% a year earlier as dwelling values outperform rental growth.

Melbourne recorded the weakest growth in rents in the March quarter, with house rents up 1.6%, while unit rents were steady. 

Mr Lawless said Sydney and Melbourne's rental markets were suffering as a result of closed international markets in areas already challenged by high supply.

"Melbourne unit rents have fallen by -8.2% over the year and Sydney unit rents are -4.9% lower," he said.

“Some inner city precincts of Melbourne have seen unit rents fall by more than -20% over the past 12 months.

"Prospects for a material improvement in rental conditions across these inner city high density precincts are largely dependent on a return of tenancy demand from international students and visitors, who were previously a key component of rental demand." 

What capital city suburbs have the highest rental yield? 

The CoreLogic Rental Review for the March 2021 quarter revealed the highest yielding suburb for each capital city. You can see a breakdown for each capital in the tables below:

Sydney

Suburb

Region

Property type

Gross rental yield

Median rent

Millers Point

Sydney - City and Inner South

Houses

7.5%

$1,023

Gorokan

Central Coast

Units

5.0%

$383

North Gosford

Central Coast 

Units

4.9%

$450

West Gosford

Central Coast

Units

4.9%

$455

Gosford

Central Coast 

Units 

4.9%

$449

Carramar 

Sydney - Parramatta

Units

4.8%

$313

Warwick Farm

Sydney - South West

Units

4.8%

$334

Mount Druitt

Sydney - Blacktown

Units

4.7%

$357

Liverpool

Sydney - South West

Units

4.7%

$341

Point Frederick

Central Coast

Units

4.7%

$461

Source: CoreLogic 

Melbourne

Suburb

Region

Property type

Gross rental yield

Median rent 

Carlton

Melbourne - Inner

Units

5.1%

$378

Melton

Melbourne - West

Units

4.9%

$314

Roxburgh Park

Melbourne - North West

Units

4.9%

$372

Wallan

Melbourne - North East

Units

4.8%

$339

Travancore

Melbourne - Inner

Units

4.8%

$363

Melton South

Melbourne - West

Units

4.8%

$319

Harkness

Melbourne - West

Units

4.8%

$326

Hastings

Mornington Peninsula 

Units

4.7%

$385

Craigieburn

Melbourne - North West

Units

4.7%

$359

Truganina

Melbourne - West

Units

4.7%

$360

Source: CoreLogic 

Brisbane

Suburb

Region

Property type

Gross rental yield

Median rent

Waterford West

Logan - Beaudesert

Units

8.8%

$303

Woodridge

Logan - Beaudesert

Units

8.6%

$281

Logan Central

Logan - Beaudesert

Units

8.3%

$272

Slacks Creek

Logan - Beaudesert

Units

8.2%

$302

Kingston

Logan - Beaudesert

Units

7.6%

$331

Browns Plains 

Logan - Beaudesert

Units

7.5%

$351

Booval 

Ipswich 

Units

7.4%

$274

Loganlea 

Logan - Beaudesert

Units

7.4%

$330

Eagleby

Logan - Beaudesert

Units

7.2%

$315

Mount Warren Park

Logan - Beaudesert

Units

7.1%

$292

Source: CoreLogic

Adelaide

Suburb

Region

Property type

Gross rental yield

Median rent

Elizabeth North

Adelaide - North

Houses

7.8%

$291

Elizabeth South

Adelaide - North

Houses

7.5%

$296

Elizabeth Downs

Adelaide - North

Houses

7.3%

$301

Davoren Park

Adelaide - North

Houses

7.3%

$291

Salisbury

Adelaide - North

Units

7.3%

$290

Elizabeth Grove

Adelaide - North

Houses

7.2%

$301

Smithfield

Adelaide - North

Houses

6.8%

$318

Elizabeth Park

Adelaide - North

Houses

6.7%

$310

Klemzig

Adelaide - North

Units

6.7%

$315

Salisbury East

Adelaide - North

Units 

6.7%

$290

Source: CoreLogic

Perth

Suburb

Region

Property type

Gross rental yield

Median rent

Orelia

Perth - South West

Units

8.9%

$239

Kelmscott

Perth - South East 

Units

7.9%

$294

Armadale

Perth - South East 

Units

7.7%

$293

Gosnells

Perth - South East 

Units

7.3%

$308

Queens Park

Perth - South East 

Units

7.2%

$362

Shoalwater

Perth - South West

Units

7.2%

$283

Cloverdale

Perth - South East 

Units

7.0%

$382

East Cannington

Perth - South East 

Units

7.0%

$380

Cannington

Perth - South East 

Units

7.0%

$374

Success

Perth - South West

Units

7.0%

$357

Source: CoreLogic

Darwin

Suburb

Region

Property type

Gross rental yield

Median rent

Parap

Darwin

Units

8.%

$457

Bakewell

Darwin

Units

8.3%

$367

Woolner

Darwin

Units

7.8%

$506

Darwin

Darwin

Units

7.8%

$523

Johnston

Darwin

Units

7.7%

$421

Rosebery

Darwin

Units

7.7%

$419

Driver

Darwin

Units

7.6%

$384

Nightcliff

Darwin

Units

7.5%

$390

Millner

Darwin

Units

7.2%

$370

Bayview

Darwin

Units

7.0%

$580

Source: CoreLogic

Canberra

Suburb

Region

Property type

Gross rental yield

Median rent

Curtin

ACT

Units

6.7%

$408

Lyons

ACT

Units

6.5%

$450

Gungahlin

ACT

Units

6.4%

$473

Wright

ACT

Units

6.1%

$505

Phillip

ACT

Units

6.1%

$472

Franklin

ACT

Units

6.1%

$479

Braddon

ACT

Units

6.0%

$544

Belconnen

ACT

Units

5.9%

$474

Crace

ACT

Units

5.9%

$488

Harrison 

ACT

Units

5.9%

$482

Source: CoreLogic


Photo by Nao Takabayashi on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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