Rental market reaccelerates as pace of capital growth falls

Continuing the trend seen since the onset of the pandemic, regional dwelling rents outpaced growth in capital city dwelling rents over the quarter, with regional rents rising 2.9% compared with a 2.5% rise across the capitals. Compared to the December quarter, the pace of growth increased across both markets, up 80 and 40 basis points for the combined capitals and combined regionals respectively.

In contrast and bucking the trend seen since May 2019, national unit rents rose at a faster pace than national house rents, at 3.0% and 2.4% respectively, with both segments also seeing an increase in the pace of quarterly rental growth. Despite the recent surge in unit rents, houses (9.0%) are still outperforming units (8.0%) in the annual trend.

Similar to the national results, the combined capitals unit rents outperformed house rents over the first quarter, increasing 3.1% compared to a 2.2% rise in house rents. The pace of capital city rental growth has accelerated compared to the previous quarter, up 30 basis points for houses and two percentage points for units. This has seen the annual performance gap between capital city houses and units fall to the smallest gap since the onset of COVID, at just 80 basis points.

CoreLogic Head of Research, Eliza Owen, says it’s interesting to see that as the national pace of capital growth falls, the rental market has re-accelerated

“Much of this momentum could be stemming from a recovery in Melbourne rent values, which saw a peak-to-trough decline of -4.0% between March and December of 2020, but have since recovered to pre-COVID levels and hit new record highs. The only market which has not yet quite recovered full value since the onset of COVID is the Inner Melbourne market, but it is well on its way.”