Rent prices end 2020 with a bang, decade high growth

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on January 27, 2021
Rent prices end 2020 with a bang, decade high growth

Rent prices across the country rose 0.6% in December, the biggest monthly increase in a decade.

CoreLogic's Rental Review for the December 2020 quarter shows Australia's rental market recorded the biggest monthly increase in prices since 2010, with rental rates rising 0.6% over the month nationally.

The 10 year record is mostly because rental prices for houses rose by 0.9% over the month, offsetting a -0.1% fall in apartment rents. 

Rentals in regional markets outperformed those in capital cities, with both house and unit rents finishing 1.1% higher in December. House rents rose 2.9% in the December quarter while apartment rents rose 2.6%.

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

Lender

Variable
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UNLIMITED REDRAWSSPECIAL OFFER
  • 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%
UNLIMITED REDRAWSSPECIAL OFFER

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
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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
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NSW/VIC/SA METRO & INNER REGIONAL AREAS
NSW/VIC/SA METRO & INNER REGIONAL AREAS

Variable Home Loan (Principal and Interest)

  • $5000 Cashback. T&Cs Apply.
Variable
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REFINANCE ONLY
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Home Loan – Refinance Only

  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
More details
NO ONGOING FEESFREE REDRAW FACILITY
  • Rate Match Guarantee. Tic:Toc will match the rate on identical variable P&I home loans. T&C's Apply.
NO ONGOING FEESFREE REDRAW FACILITY

Live-in Variable Loan (Principal and Interest) (LVR < 90%)

  • Rate Match Guarantee. Tic:Toc will match the rate on identical variable P&I home loans. T&C's Apply.

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 June 25, 2022. View disclaimer.

CoreLogic's Head of Research, Tim Lawless said the COVID-19 pandemic has reshaped housing demand as people seek to move away from crowded inner city areas.

“Higher density housing markets have seen less demand during the pandemic; a trend that has been amplified by stalled overseas migration and remote working opportunities luring residents further afield," Mr Lawless said.

"Whether this trend has some longevity is yet to be seen, but international borders are likely to remain closed for some time yet, and for many, remote working conditions have proved to be productive.”

See also: The rise of regional property in COVID-19

This was reflected in weak conditions in unit rents as inner city apartment markets bear the brunt of reduced demand as a result of the pandemic. 

Capital city apartment rents fell by -0.3% over the month to be down by -1.6% over the December quarter. Meanwhile, house rents in capital cities rose by 0.7% in the month to be 0.8% higher overall in the December quarter.

Annually, apartment rents plummeted -4.6% in 2020 while house rents performed better, recording a 3.3% national rise.

Screen Shot 2021-01-27 at 10.48.23 am

Sydney and Melbourne apartment rents plunge; regional markets soar

The inner city apartment markets in Sydney and Melbourne recorded the biggest falls, plummeting -5.7% and -7.6% over the 12 months to December 2020. 

However, Sydney apartments maintained their position as the nation's most expensive capital city to rent a unit, despite a $36 reduction in rental prices recorded in the year to December 2020.

Similarly, Melbourne has held onto its position as the third most expensive apartment market of the capital cities, behind Sydney and Canberra.

Meanwhile, rental prices in regional markets are soaring as Australians making a sea or tree change compete for rental properties. 

Perth and Darwin were among the best performing rental markets of 2020, with house rents in Perth recording double digit price growth over the year to December 2020 at 10.1%. Perth apartment rents also experienced strong growth, rising by 6.8%. 

In Darwin, rental prices for houses rose by 9.6% and units by 7.6%.

The remaining capital cities also recorded consistent rental growth over the year but the trend of houses recording higher growth than apartments remained evident. 

In Canberra, house rents rose 4.7% annually while unit rents rose by an incremental 1.5%.

This saw Canberra overtake Sydney as the most expensive capital city to rent a house in 2020, with a median rental value of $624 per week - $10 more expensive than the typical house in Sydney. 

Adelaide experienced similar rent movements to Canberra: house rents were up by 3.6% compared with a 1.4% rise in the apartment market.

Brisbane house rents rose by a marginal 2.7% while apartment rents fell -1.1%.


Photo by Tom Hill 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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Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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