The growth of rental markets in regional areas continues to prevent overall rents in Australia from continuing to fall, according to CoreLogic.
The fall in rental values ??in Australia fell from 0.5% in the June quarter to 0.2% in the September quarter. This was due to the 1.2% gains in regional rents.
In contrast, capitals reported a combined 0.7% drop in rents, similar to the decline in the previous quarter.
Melbourne, Sydney and Hobart were the worst performers. The increase in supply in these areas over the past few months continues to weigh on asking rents.
Additionally, these regions have been hit the hardest in terms of demand, as they continue to face the effects of the COVID-19 outbreak on employment and migration.
Tim Lawless, head of research at CoreLogic, said the weakest rental conditions are found in urban neighborhoods where supply and demand shocks have negative effects on rents.
"These neighborhoods have seen an increase in the supply of new units over the past few years, while more recently demand has dropped sharply due to stagnant immigration and weaker conditions in the labor market in industries where workers are more likely to hire, ”he said.
However, it's worth noting that not all capital cities have weak rental markets. In fact, Perth and Darwin have experienced a steady recovery from their weakness during the post-mining boom.
"Rising rental rates are a symptom of tight supply due to low levels of investment and residential construction in recent years as demand appears to be improving" , Lawless said.
In terms of market segments, units remained the main obstacle to overall rents. During the quarter, unit rents fell 1.9% while homes grew 0.5%.
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