Rents accelerating in early 2024

Rent surge continues

CoreLogic released its latest rental report, and it looks as though rents re-accelerated in early 2024, as international students and permanent migrants powered up the market further. 

Over the April quarter rents increased by +2.8 per cent to be +8.5 per cent higher than a year earlier. 

Rents were a little softer across regional Australia, but rents increased surprisingly strongly across most of the capital cities in particular, with rents up +2.9 per cent over the quarter, and +9.4 per cent over the year to April 2024. 

Over the past year rental price growth has been very strong in Perth, Melbourne, Sydney, Brisbane, and Adelaide. 

Source: CoreLogic

Nationally the median rental price rose to a fresh high $627/week, with Sydney hitting a new high for any Aussie capital city of $770/week. 

Rental yields have thus picked up somewhat from their cycle lows, even as housing prices rise. 

CoreLogic cited record high population growth as a principal reason for the strength and tightness of many rental markets.

The below chart from CBA illustrates the scale of the challenge as net immigration has continued to scale new peak annual rates:

And since little can be done in the short-term to address these issues, rents are likely to continue rising through 2024, noted CoreLogic.

Inflation pulse fading

In some brighter news, however, inflation in Australia does look to be softening a little.

The Melbourne Institute inflation gauge rose by only 0.09 per cent in April, and it looks like inflation may continue to fade as time goes on.

Dr. Alex Joiner brilliantly charts the figures as ever:

Source: MI, Dr. Alex Joiner, IFM Investors

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