In good news for property investors, rents are on the way up throughout Victoria.
The latest Corelogic Rental Review showed that:
- Melbourne rental rates increased by 1.2% over the first quarter of 2018 while outside of Melbourne, rents grew by 0.5% over the same period.
- Over the past 12 months, Melbourne rents have climbed 3.5% higher compared to an increase of 2.9% across regional Victoria.
- Gross rental yields in Melbourne are currently recorded at 2.93% compared to 4.52% in regional Victoria.
- At the same time 12 months ago, yields were recorded at 3.01% and 4.80% respectively. N
- o Melbourne regions recorded a decline in rents over the first quarter of the year.
To help you understand what’s happening with rents throughout the Garden State, first let’s look at the national overview from CoreLogic and then their rental figures for the various regions of Victoria.
- Nationally, rents climbed by 0.3 per cent in March to be 1.1 per cent higher over the first quarter of 2018 and 2.2 per cent higher over the 12 months to March 2018. In comparison to the first three months of 2017 when rents increased by 1.5 per cent, the growth in rental prices has slowed (-0.4 per cent).
- Rental growth over the first quarter is higher in the regional markets (+1.2 per cent) than in the capital cities (+1.0 per cent). This trend is also reflected in activity over the past 12 months — rents are up 3.1 per cent in the regions compared to an increase of 1.9 per cent across the capitals.
- Over the first quarter, rents climbed in all capital cities except for Darwin (-0.3 per cent). The highest quarterly rental increases were in Hobart (+5.0 per cent), which also reported its strongest first quarter growth on record, and Canberra (+2.3 per cent).
- Over the past 12 months, Hobart reported the highest growth in rental rates (+11.7 per cent). Rents climbed higher in all capital cities except Perth (-1.3 per cent) and Darwin (-1.6 per cent).
- The national median rent is $427 ($426 for houses and $430 for units). Across the capital cities, the median rental is $459 per week. The median house rental in the capital cities is $460 compared to $453 for units. Across the regional markets, both houses and units averaged $355 per week.
- At $374, Adelaide has the cheapest weekly rent out of all the capital cities. The highest median weekly rent is in Sydney, where the cost is $582.
- Rental yields have increased nationally by 0.1 per cent over the past 12 months to 3.68 per cent. The highest rental yields are in Darwin (5.83 per cent) and Hobart (5.01 per cent). Melbourne (2.93 per cent) has the lowest rental yields, followed by Sydney (3.20 per cent).
- At $550 per week, rentals in Inner South Melbourne are the most expensive in Victoria, followed by Inner Melbourne at $545 per week.
- In regional Victoria, rental rates are highest in the Mornington Peninsula ($418) and the lowest in the North West ($257). Along with Geelong, the Mornington Peninsula also had the highest quarterly growth in rental rates at 2.1 per cent.
- LaTrobe Gippsland (-2.2 per cent) and Shepparton (-0.4 per cent) were the only regions in Victoria to suffer a fall in median rent over the quarter.
- The highest current yields are in the North West at 6.6 per cent, followed by Shepparton at 5.4 per cent.
Melbourne rental rates increased by 1.2% over the first quarter of 2018 while outside of Melbourne, rents grew by 0.5% over the same period.
Over the past 12 months, Melbourne rents have climbed 3.5% higher compared to an increase of 2.9% across regional Victoria.
Gross rental yields in Melbourne are currently recorded at 2.93% compared to 4.52% in regional Victoria.
At the same time 12 months ago, yields were recorded at 3.01% and 4.80% respectively.
No Melbourne SA4 regions recorded a decline in rents over the first quarter of the year.
Similarly, rents increased across each Melbourne SA4 region over the past 12 months.
Although rents have increased in certain areas over the past year, namely the inner city areas, values have increased at a slower pace pushing yields slightly higher.
At the same time, many of the outer areas of the city have seen yields continue to soften over the past year.
Latrobe-Gippsland and Shepparton were the only regional SA4 areas to record a rental fall over the quarter while rents were lower over the year in the North West.
Although rents have been increasing in most regional Victorian areas over the year, each region has seen yield compression with rental growth slower than value growth.
|Current Yield||Yield 12 mths
|Latrobe – Gippsland||$309||-0.6%||-2.2%||-2.2%||1.2%||5.0%||5.2%|
|Melbourne – Inner||$545||0.7%||1.7%||1.7%||4.8%||3.4%||3.3%|
|Melbourne – Inner East||$542||0.4%||1.4%||1.4%||3.7%||2.3%||2.2%|
|Melbourne – Inner South||$550||0.1%||0.7%||0.7%||1.9%||2.6%||2.6%|
|Melbourne – North East||$419||0.2%||1.0%||1.0%||4.1%||3.0%||3.1%|
|Melbourne – North West||$460||0.3%||0.9%||0.9%||4.7%||3.4%||3.5%|
|Melbourne – Outer East||$434||0.6%||1.2%||1.2%||3.4%||2.9%||3.0%|
|Melbourne – South East||$403||0.2%||1.0%||1.0%||2.2%||2.9%||3.2%|
|Melbourne – West||$389||0.3%||0.8%||0.8%||3.0%||3.2%||3.5%|
|Warrnambool and South West||$284||-0.2%||0.5%||0.5%||1.6%||5.1%||5.2%|
Source of data : Corelogic Quarterly Rental Review