Investors have helped fuel Australia’s property boom, but the growth in the rents they charge tenants has hit its lowest annual rate in more than a decade.
Combined capital city rents increased by just 1.8 per cent in 2014.
Rents for houses increased 1.2 per cent, while unit rents increased 2.5 per cent during 2014, a CoreLogic RP Data quarterly rental review shows.
The slowing in rental growth comes as home values continue to increase in Australian cities and advertised rents remain unchanged.
CoreLogic RP Data research analyst Cameron Kusher said the rental market was the most subdued since the mid 2000s, with rental rates across Australian capital cities remaining flat in 2014.
“Given the recent high number of dwelling approvals and commencements coupled with the high level of purchase activity from investors, we would anticipate that the rate of rental growth will remain soft throughout 2015,” he said.
Rents still increased over the year in most cities but Canberra and the resources centres of Perth and Darwin experienced a decline amid a slowdown in the mining sector.
Perth houses fell 2.2 per cent and units fell 2.3 per cent while Darwin houses experienced a 0.8 per cent decline in house rents as unit rents dipped 1.8 per cent over the quarter.
Rents have plummeted in the iron ore mining area of the Pilbara in Western Australia, with unit rents diving 39 per cent in the past year and house rents dropping 25 per cent.
Meanwhile overall advertised rents in Australian capital cities remained unchanged during the final quarter of 2014 at $430 per week for houses and $410 for units.
Over the past 12 months, Perth house rents fell 6.3 per cent and Canberra units fetched 7.3 per cent less.
Sydney units recorded a one per cent quarterly fall and Melbourne units dropped 1.4 per cent over the same period.
Annual house rent changes by capital city
- Sydney: 2.9%
- Melbourne: 1.3%
- Brisbane: 2.5%
- Perth: -6.3%
- Darwin: -0.8%
- Adelaide: 2.9%
- Hobart: 3.8%
- Canberra: -5.0%