No capacity left for rent increases

The latest rental price data from RP data shows rents for houses have remained flat over the June quarter.

Hobart recorded the largest falls in rents, falling 1.5 percent. Melbourne was close behind at 1.4 percent, while Brisbane, Adelaide, Perth and Darwin recorded no change. Sydney witnessed a rise of 2.3%, followed by Canberra increasing by 2.1 percent.

While official ABS data for this quarter is not available until the 28th, the flat result from RPData suggests rents have not kept up with the pace of inflation for the first time in three years, signalling a sharp U turn in rent increases.


Note : Last data point estimated from RPdata Rents and TD Securities Inflation data. Official data due 28th July

After decades in which rents tracked CPI, in 2006, property lobby groups started to spur on landlords that they can raise rents faster than inflation/wage growth, i.e. faster than renters ability to service the rent increases. Some lobby groups spurred investors to “jack up” rents by 20% per annum. It appears any excess capacity to pay higher rents have been soaked up, and now rental properties are un-affordable, resulting in lower demand.

ยป House rents flat in June quarter – The ABC, 7 July 2010.




1 Comment

  1. Rents will fall as it has started to reach the point that people can not keep finding the money to meet the costs of basic needs such as food ect….. Well done Australia you have become a Nation of debt slaves, what a joke!

Comments are closed.