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Annual rental growth in Australia’s capital cities has slowed to 8.6% from a peak of 10.6% in April, according to CoreLogic’s latest Housing Chart Pack.

The July report reveals a significant deceleration in unit rental growth across Sydney, Melbourne and Brisbane.

Eliza Owen, CoreLogic’s Head of Research Australia, said the growth rate in capital city unit rents has decreased from 15.1% to 7.6% over the past year.

“Although rents have not actually declined year-on-year, there is a clear slowing in the pace of annual growth across the large inner city unit markets of Sydney, Melbourne and Brisbane,” Owen said.

She attributed this slowdown to easing demand and early signs of declining net overseas migration, which peaked in the March quarter of 2023 according to Australian Bureau of Statistics data.

In Sydney, the annual growth rate for unit rents plummeted by 10 percentage points to 7.1%. Melbourne unit rents saw a 7.4 percentage point drop to 7.5%, while Brisbane’s annual growth in unit rents decelerated from 15.3% to 8.5%.

Despite the slowdown, Owen noted that growth rates in Sydney and Melbourne remain well above their historic averages of 2.7% and 2.6% respectively throughout the 2010s.


“While Sydney and Melbourne still have a much higher growth rate than the historic annual average, the consistent slowdown in growth is an early sign of demand pressures slowing in the market,” Owen said.

In contrast, house rents and regional rents have seen a slight increase, suggesting a shift in rental demand away from capital city units towards houses and regional markets.

Other key findings from the July Housing Chart Pack include:

  • The combined value of residential real estate in Australia rose to $10.8 trillion at the end of June.
  • Quarterly growth pace has eased to 1.8% in the June quarter, down from 3.3% in the same quarter last year.
  • Home value changes vary significantly across capital cities, with Perth values increasing 6.4% in the June quarter while Melbourne values fell 0.6%.
  • National annual sales count reached 508,610, 8.6% above last year’s volumes.
  • New listings are trending 7.8% higher than last year, but total listings remain 17.3% below the historic five-year average.
  • The combined capital cities auction clearance rate averaged 64.2% in the four weeks to June 30, down from 65.1% in the previous period.
  • Dwelling approvals saw a 5.5% lift in May, led by a 14.2% increase in unit approvals.

Owen concluded that while rental demand is not strong enough to sustain ongoing double-digit growth across major cities, the rental market remains tight with growth rates still above historic averages in many areas.

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