Housing rents grew at their slowest pace in over a decade over the past year, pushing rental yields down as prices continued surging.
Growth in rents over the past year was only 1.7 per cent on average across the state and territory capitals.
There was wide variation across the country, with rents rising 3.5 per cent over the year for houses in Sydney and 4.5 per cent for units in Hobart, and falling by 4.7 per cent for both houses and units in Darwin.
But, overall, the growth rate was unusually slow by the standards of recent years - the slowest since 2003, according to Cameron Kusher, research analyst at CoreLogic RP Data, which released the figures on Thursday.
And Mr Kusher attributed that to three things: strong buying by investors and increased construction, both adding to the supply of properties available for rent, and slower international migration decreasing underlying demand.
Ongoing strength in construction activity could cause rental growth to slower even more, he said.
"This is likely to be most evident in the markets where new unit supply is surging, being Melbourne and Brisbane and to a lesser extent Sydney."
With the average price of housing rising by 7.9 per cent over the year to April, the rental yield on investment properties continued to fall.
In April the gross yield - rent before tax and expenses as a percentage of the property's value - fell to 3.7 per cent from 3.9 per cent a year before, meaning investors are increasingly betting on further strong price rises to justify their purchases.
"Rental yields for houses and units are sitting at their lowest level since late 2010," Mr Kusher said.
MEDIAN RENTS AND ANNUAL CHANGES (APRIL)
- Sydney: $613, +3.5pct
- Melbourne: $454, +2.5pct
- Brisbane: $438, +2.0pct
- Adelaide: $375, +1.2pct
- Perth: $483, -4.2pct
- Hobart: $347, +3.1pct
- Darwin: $601, -4.7pct
- Canberra: $508, -2.4pct