Rental decline accelerates!

 

The monthly figures from CoreLogic have revealed a continued house rent decline by over 0.9 per cent  over the last year; this is the largest fall on record since records began in 1996.

The state and territory  with the biggest drop in average rentals was the northern Territory with Darwin posting a 16.2 per cent drop.

Adelaide and Brisbane posted small declines whilst Sydney moved slightly higher but at the slowest rate on record.

Melbourne and Canberra saw moderate rises and Hobart had a strong increase in rents at 4.6 per cent.

We will see rents fall further’

CoreLogic said “historically high levels of new construction is increasing housing supply at the same time as slowing population growth is reducing growth in demand.”

CoreLogic further stated “tenants now have more choice on offer and may be able to move into superior homes for similar, or even lower, rents.”

So is this the time to sell your investment property, who knows, if you are to read the latest economic forecasts the Australian economy is heading for a period of slow growth or even recession. Technically with the low to non existent wage growth Australia when measured this way is in recession.

Ultimately Landlords may need to expect lower returns going forward  as tenants are unable to meet rising inflationary costs due to static wage growth. The only positive is that mortgage rates may see yet further falls, which will indirectly return positive growth.