Rental yields continue to fall as property prices soar
Although lifting to record highs, rent values continue to be outpaced by purchase prices, leading to a significant decline in rental yields.
Latest figures from CoreLogic revealed that Australian rent values increased 7.5 per cent in the year to July – the fastest annual appreciation since December 2008.
The regions proved more resilient than the capitals, with an average annual increase in rents of 11.9 per cent. Combined capitals, on the other hand, rose by only 5.9 per cent.
Still, some capital cities outperformed others, with Darwin clocking the highest annual increase in rents overall at an impressive 21.8 per cent, followed by Perth with 16.4 per cent.
Regional Tasmania led the rent increase across the regional market, with 14.1 per cent, followed by regional Queensland with 13.7 per cent, regional Western Australia with 13.4 per cent and regional NSW with 11.3 per cent.
But despite the rapid growth in rent values, growth in purchase values has been higher, “meaning gross rental yields have generally continued to decline”, according to CoreLogic.
In the past 12 months to July, national dwelling values have increased by 16.1 per cent – more than double the rise in rent values over the same period, and the highest annual growth rate since February 2004.
As such, national gross rental yields have declined to 3.4 per cent across dwellings as of July 2021.
Combined regionals saw a higher average gross rental yield at 4.5 per cent, while combined capitals only had 3.1 per cent.
Across both regional and capital markets, the Northern Territory boasted the highest yields of 6.5 per cent.
It was narrowly trailed by Regional WA with 6.2 per cent, Darwin with 6 per cent, Regional SA with 5.6 per cent, Queensland with 4.9 per cent, Tasmania with 4.7 per cent and Perth with 4.3 per cent.
Meanwhile, Adelaide clocked rental yields of 4.2 per cent, Hobart and Canberra of 4.1 per cent and Brisbane of 4 per cent.
Sydney and Melbourne had the lowest gross rental yield of 2.5 per cent and 2.8 per cent, respectively.
Gross rental yields July 2021
|
AREA |
GROSS RENTAL YIELD |
|
Regions |
|
|
Regional NT |
6.5% |
|
Rest of Tas |
4.7% |
|
Rest of WA |
6.2% |
|
Rest of SA |
5.6% |
|
Rest of Qld |
4.9% |
|
Rest of Vic |
3.8% |
|
Rest of NSW |
4.0% |
|
Cities |
|
|
Canberra |
4.1% |
|
Darwin |
6.0% |
|
Hobart |
4.1% |
|
Perth |
4.3% |
|
Adelaide |
4.2% |
|
Brisbane |
4.0% |
|
Melbourne |
2.8% |
|
Sydney |
2.5%
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