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
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME 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%
LIMITED TIME 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%
VariableMore details
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
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
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees

Rates correct as of January 18, 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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