Capital rental markets appear to be shifting in favor of renters in terms of affordability, according to the latest report from ANZ and CoreLogic.
Over the past five years, Australian capital cities have reported 0.9% annualized growth in the value of rents in the market, which the report says indicates a "move towards better affordability".
In recent years, rental value growth has been weak in some of the largest state financial markets. The report says this could be due to the surge in investment and housing development that occurred between 2012 and 2017, especially in Sydney, Melbourne and Brisbane.
In Sydney, the areas with the greatest decline in rental values ??are the southern and eastern interior suburbs.
Melbourne reported a more stable performance, which was supported by historically high international migration. However, the COVID-19 epidemic, which has halted the growth of the movement of people, has also caused rents in Melbourne to drop by 1%.
Brisbane, on the other hand, experienced the weakest growth in rental values. The report says this could be attributed to a high influx of investor-grade stocks in 2016, when units were being built in Brisbane at an all-time high. As rental values ??have gradually gained momentum, the COVID-19 outbreak has triggered a reversal.
However, as rents fell in the previous quarter, it is crucial to consider the substantial income losses over the period due to the COVID-19 outbreak. Citing figures from the Australian Bureau of Statistics, the report said total wages paid between mid-March and mid-June fell 6.3%.
The report says that for tenants who are less affected or unaffected by the COVID-19 downturn, affordability can improve dramatically, depending on the region they are in.
On the other hand, affordability of rents could deteriorate further in the coming quarters for some tenants, especially if the unemployment rate and declining incomes continue to rise.
Top suburbs:
coburg north
,
Darlington
,
artarmon
,
new city
,
East Victoria Park
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