Pete Wargent blogspot

PERSONAL/BUSINESS COACH | PROPERTY BUYER | ANALYST

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Monday, 20 January 2025

Rental inflation is beyond the peak

Rent inflation peaks

CoreLogic released its latest rental market update for Q4 2024, and it seems that rental price inflation has, in their words, "well and truly peaked".

In fact, rents were up 4.8 per cent over the year, well down from the 8.1 per cent increase in 2023,

This was the lowest annual increase since all the way back in March 2021, mirroring data from SQM Research's asking rents series. 


Perhaps the biggest surprise was a -0.5 per cent quarterly decline in rents in Melbourne, despite the investor exodus.

CoreLogic noted that rents have increased by 36 per cent nationally since the onset of the pandemic in 2020. 

Despite the slow rate of building as compared to population growth, rental vacancy rates had eased from 1.4 per cent to 1.9 per cent by December, as renters adjusted to more expensive leases.

December can be a quieter time of year for the residential leasing market as Aussies head overseas, so it will be interesting to see how things shape up in January and February. 

Inflation easing

Rents make up around 6 per cent of the consumer price index basket, and have been a significant contributor to inflation since 2021, alongside the steepling cost of building a new home.

It seems that price pressures in both of these areas have peaked, while government subsidies for energy have suppressed headline inflation on electricity bills. 

The quarterly inflation figures are due for release next week. 

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