HOUSING
AFFORDABILIT YREPORT
JUNE QUARTER 2020, RELEASED JULY 2020
Rental Market Report – Special COVID-19 edition

RENTAL MARKET REPORT – SPECIAL COVID-19 EDITION
This is the third edition of the ANZ-CoreLogic Housing Affordability Report, thepre-eminent guide to the trends and drivers of housing affordability across Australia.
Housing is a fundamental human requirement, as a form of both shelter and security. The focus of housing affordability is often
on home buyers; prices, interest rates, deposits. But with an increasing share of Australians renting their home, it is imperative
we also look at rental metrics when thinking about housing affordability. Home ownership is not for everyone, but secure
housing is. Whether it is to buy or rent, access to housing at an affordable price is a necessity.
In the current crisis, the rental market has been more heavily affected than the buyers’ market, with a combination of fallingdemand and rising supply.
Households who rent have been more widely impacted. People who work in the hospitality sector, where job and income
losses have been the deepest, have a much higher likelihood of renting than owning homes. And while there has been aformal program to defer mortgage payments, relief for renters has been much less defined.
Rental market conditions will flow through to investor behaviour. Many Australians choose to save through investment inhousing. The fluctuations in the rental market will directly influence investor demand over the next few years and flow throughto both prices and construction, and in turn measures of housing affordability.
Housing affordability will remain a key focus for policy makers, with the COVID-19 crisis only exacerbating the challenges
facing governments. The pandemic and its associated economic shock will have long lasting impacts on housing affordability.
The financial impact has not been evenly felt, and the stimulus measures designed to offset it, will have varying impacts of
their own.
Overlaying these issues, is the persistent problem of low income growth, which will continue to be a challenge for policy
makers.
Over time, ANZ and Corelogic’s tracking of a variety of housing affordability metrics will provide the data and analysis to informthe discussion around policies that aim to improve housing affordability for all Australians.

Richard Yetsenga
Chief Economist, ANZ
Felicity Emmett
Senior Economist, ANZ© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

1

CONTENTS
Rental Market Report – Special COVID-19 edition

1

Introduction

3

Understanding rental demand amid COVID-19

4

The shutdown of ‘social’ consumption

4

Overseas travel and the rental market

6

The state of rental supply and COVID-19

8

Airbnb – from short term, to long term,
and back again

9

CoreLogic rental listings

10

Rental market metrics

14

Rental values and affordability

14

Where are tenants most likely to negotiate
lower rents?

17

Rental yield performance

192

INTRODUCTION
One of the most impacted sectors of the housing market amid COVID-19 has been
the rental market. Due to a mixture of negative demand and supply shocks, rental
market conditions weakened over April to June. This came off the back of an already‘weak’ rental environment, where annualised growth in rents has been subdued at
0.9% across the capital city markets for the past five years.
However, as with property values and transactions,
Australia does not have a ‘single’ rental market. Australia has
a collection of thousands of different rental markets withvariations in demographic and workforce compositions,levels of supply and price points. This report seeks tohighlight some of the ways that COVID-19 has exacerbatedthe nuances between different parts of the Australianrental market, leading to disproportionate declines in someareas over others.
The first section of this report examines factors thathave affected rental demand as a result of the onset of
COVID-19. It highlights the industries and employees
most affected by the pandemic, and how this has
disproportionately affected the rental market. It also
looks at the importance of net overseas migration torental markets.
The second section looks at the state of rental supply inthe lead up to, and during, COVID-19. While narratives ofincreased rental supply have dominated in recent months,
a combination of finance and listings data suggests thatoversupply in rental markets is a somewhat localised
phenomenon.
Before the onset of the pandemic in Australia, investor
participation in the housing market was at its lowest since2001. Investor finance fell sharply over April and May due
to high levels of uncertainty. If sustained, this suggests thatthe decline in demand for rentals could be partially offset
by a decline in the supply of rental property.

The third section of the report contains a summary ofrental market metrics, namely the change in rental income
and yields that have occurred in recent months. As withmany housing market and economic indicators, rental
market conditions eased from April to June. This section
contains a snapshot of suburb-level data, highlighting
the suburbs in which tenants may be most successful
negotiating rent reductions.
The findings in this report suggest that there are mixed
opportunities for landlords and tenants across Australia,
depending on where they are located. For tenants,
inner-city areas of Sydney and Melbourne present thegreatest opportunity for negotiating a reduction in
rent. For landlords, these same areas pose greater
short-term risk.
Ultimately, the opportunity to secure lower rents is unequal
across industry and location. Rental growth has broadly
tracked below inflation and income growth, and rental
affordability has held quite firm across the capital cities.
However, for relatively unaffordable markets like Hobart,
broad-based affordability measures should be considered
for longer term improvements in affordability, rather thanrelying a global pandemic to reduce demand.

Eliza Owen
CoreLogic Head of Research Australia© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

3

UNDERSTANDING RENTAL DEMAND AMID COVID-19
COVID-19 has uniquely impacted
demand for rental accommodation.
Demand for rental properties fell withthe onset of the pandemic, which isreflected in both rental prices andrental listings. This was likely mostattributable to:• A disproportionate loss of income inindustry sectors where workers weremore likely to be renting; and• The closure of Australian borders tointernational travellers and migrants,
who tend to rent when they firstarrive rather than buy.
THE SHUTDOWN OF ‘SOCIAL’CONSUMPTIONCHANGE IN PAYROLL JOBS BETWEEN 14TH OF
MARCH AND 27TH JUNE, AUSTRALIA

Accommodation and Food Services-21.2%

Arts and Recreation Services-18.1%

Rental, Hiring and Real Estate Services-7.7%

Information Media and Telecommunications-7.1%

Administrative and Support Services-6.9%

Other Services-6.3%

Transport, Postal and Warehousing-6.1%

Agriculture, Forestry and Fishing-6.0%

Health Care and Social Assistance-5.2%

Manufacturing-4.4%

Education and Training-4.3%

Wholesale Trade-4.1%

Mining-4.1%

Professional, Scientific and Technical Services-3.9%

Construction-3.9%

Retail Trade-3.3%

Public Administration and Safety-0.9%

Financial and Insurance Services

0.9%Electricity, Gas, Water and Waste Services

1.4%

Source: ABS

Past research analysing the economic impact of apandemic has highlighted the increasingly ‘social’ natureof consumption1. The COVID-19 pandemic required aself-engineered downturn that centred on prohibitingsocial gathering. This meant that any associatedconsumption was withdrawn from the economy.
On March 23rd, the federal government announced thetemporary shutdown of bars, clubs, cinemas, places ofworship, casinos and gyms. Coupled with progressive
border closures, businesses across hospitality, tourism andthe arts were immediately impacted. Furthermore, RBA
analysis suggests that café, restaurant, accommodation
and arts services tend to be more geared and less liquidthan other industries2 which creates additional challenges
that has contributed to business closures. The rise in
online shopping and food takeaway services has not been
sufficient to offset the deterioration of business conditionsin these sectors3.

The data suggest that between the week ending 14th ofMarch (when the 100th case of COVID-19 was confirmedin Australia) and the week ending 27th of June, 21.2% of
payroll jobs had been lost across accommodation and foodservices, and 18.1% of jobs had been lost across arts andrecreation services. This compares with an average declineof 4.2% of jobs across other industries, and a 5.7% decline
in total payroll jobs across Australia.
According to regional employment data from the ABS, thenumber of those employed across accommodation andfood services and arts and recreation services averaged
1.17 million over the year to February 2020. This equates toabout 9.1% of the labour force.
This has important implications for the rental market.
This is because those that are employed in these industries
are more likely to be renting4.

ABS data show that these industries, officially categorisedas ‘food and accommodation services’ and ‘arts andrecreation services’, have seen significant job losses to date.
Analysis of payroll data from the ATO has allowed the ABS
to measure changes in payroll jobs by industry, which issummarised in the graph to the right of this page.

1. Keogh-Brown, M. R., Wren-Lewis, S., Edmunds, W. J., Beutels, P., & Smith, R. D. (2010). The possible macroeconomic impact on the UK of an influenza pandemic.
Health economics, 19(11), 1345-1360.
2. RBA, (April 2020), Financial Stability Review
3. RBA, (May 2020), Statement on Monetary Policy
4. RBA, (April 2020), Financial Stability Review, citing the 2018 HILDA survey data
© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

4

CoreLogic data also shows that there is a high incidence of renting households where there is also greater workforce exposure
to these industries. The scatter graph below highlights a correlation between housing markets with a high portion of rental
properties, and a higher portion of employees in more precarious sectors. Regions of Australia where rental markets may be
more exposed to a reduction in demand due to industry exposure include inner-city Melbourne, Sydney, and parts ofsouth east Queensland.
INCIDENCE OF RENTING HOUSEHOLDS V WORKFORCE EXPOSURE TO VULNERABLE INDUSTRIES

Estimated portion of renting households

80%
70%

Melbourne - Inner
Sydney - City and Inner south
Sydney - Eastern Suburbs
Brisbane - Inner City
Darwin60%
50%

Sydney - Inner West40%

Sunshine Coast
Hobart20%

Queensland - Outback
Western Australia - Wheat Belt

10%0%Gold Coast

Perth - Inner

Toowoomba

30%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Portion of workforce in 'accommodation and food' and 'arts and recreation' services
Source: CoreLogic, ABS. Note labour force data is based on an average of four quarters to February 2020, while household renting ratio is based on
estimates from the CoreLogic property database from May 2020

While job losses in these sectors have likely already reduced demand for rentals in these areas, there are a couple of factorsthat will have helped offset these impacts.
The first are government boosts to JobSeeker and the introduction of the JobKeeper program, which would help tenants
service rent in the event of unemployment or reduced hours.
Secondly, although job losses have been more severe across tourism, hospitality and the arts, an index of job changes sincethe 14th of March suggest that these sectors have had better recovery than total combined sectors over May and June.
The jobs index for the arts and recreation services sector has recovered 7.8% since bottoming out in April. Accommodationand food services have recovered 19.0%. Total payroll jobs have risen just 4.2% in the same period. This could signal somestabilising demand in the rental market.
INDEX OF PAYROLL JOB CHANGES BETWEEN 14TH OF MARCH AND 27TH OF JUNE

100
90
80
70
60
50
40
30
20
10

Accommodation and Food Services

Arts and Recreation Services

n

n
27
-Ju

-Ju

n
13
-Ju

20

n
-Ju

-M
30

All Payroll Jobs

06

-M

ay

ay

ay
23

M
16
-

ay
09

-M

ay
02
-M

r

pr
-A
25

Ap
18
-

pr
11
-A

pr
-A

ar
-M
28

04

ar
21
-M

14
-

M

ar

0

Source: ABS© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

5OVERSEAS TRAVEL AND THE
RENTAL MARKET

Departures over May 2020 outweighed arrivals.
An estimated 300,000 temporary workers, students andtourists are estimated to have left Australia in the first few
months of the year6. This group of temporary VISA holders
were also more likely to be renting, creating a further
withdrawal in demand.

The other major demand factor for rental markets, which
has been impacted by COVID-19, is the state of overseas
migration and visitation to Australia.
Travel from overseas has been progressively restricted
since February. On March 19th, the Australian government
closed its borders to all overseas visitors other than citizens
and residents.

As with employment data, the variation of impact on rental
markets can be inferred by looking at historic regionalmigration patterns.

Provisional estimates from the ABS showed there was a
98.8% decline in overseas arrivals to Australia in May 2020
compared with May 2019. Recent overseas migration
significantly affects rental demand. Past research has
highlighted, about 80% of overseas migrants to Australia
initially rent5.
ALL OVERSEAS ARRIVALS TO AUSTRALIA (PROVISIONAL ESTIMATES)

2,500,000
2,000,000
1,500,000
1,000,000
500,000
19,120
ay
-2
02
0

ay
-2
01
9
M

M

ay
-2
01
8
M

ay
-2
01
7
M

M

ay
-2
01
6

0

Source: ABS

5. Khoo, S. E., McDonald, P., Temple, J., & Edgar, B. (2012). Scoping Study of Migration and Housing Needs. Report for National Housing Supply Council Unit,
Department of the Treasury, 31.
6. Creighton, A. (April 15th, 2020). COVID-19: Australia’s great exodus revealed. The Australian. https://www.theaustralian.com.au/nation/covid19-australias-greatexodus-revealed/news-story/643e22b0b3023a177e9dacaa03b8c830.
© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

6

The chart below shows SA4 regions across Australia by
the number of net overseas migrants contributing topopulation growth over 2019.
The graph on the left hand side shows the regions mostdependent on overseas migration for population growth.
This reflects some of the areas that may have taken a hit
to rental demand because of the departure of temporary
migrants or lack of new arrivals, such as inner-city
Melbourne. But it also highlights areas further from themain CBDs, such as Parramatta and Blacktown in Sydney,
and the Melbourne - South East region, which could be
impacted by a decline in new overseas migration.
The areas experiencing the lowest levels of net overseas
migration are largely represented by small regional areas,
where rental markets are likely to be largely unaffectedby the recent changes to migration flows. However, evensome of these regional areas are likely to see some impact
on the rental market, particularly those reliant on tourism
for income prosperity.

International border restrictions in Australia are expectedto last for at least another few months, and most likely
longer. Between the national agenda and policies overseas,
the Australian government estimates an 85% drop in
net overseas migration for 2020-21, to around 36,000.
Extrapolating an estimate of renting migrants and averagepeople per household, this points to new rental demand
from overseas falling from about 74,000 dwellings over
2019, to just 11,000 over 2020-21.
As well as creating an initial surplus of rental vacancies anddownward pressure on rental prices, this will have longer
term implications for the level of investor activity andsupply of rental stock, discussed in the next section.

TOP AND BOTTOM 20 REGIONS OF AUSTRALIA BY NET OVERSEAS MIGRATION — 2019

Melbourne - Inner

17,975

Melbourne - South East

15,135

Coffs Harbour - Grafton

625Southern Highlands and Shoalhaven593

Melbourne - West12,418Warrnambool and South West592

Sydney - Inner South West12,018

Bunbury

574

11,787

Central West556

Darwin542

Mid North Coast

531

Sydney - Parramatta
Sydney - City and Inner South
Melbourne - Inner East

8,831
7,446

Melbourne - North East

7,192

Murray438

Sydney - lnner West

6,511

Western Australia - Outback (North)423

Sydney - Eastern Suburbs

6,123

Western Australia - Wheat Belt

382

Melbourne - Inner South

5,950

Western Australia - Outback (South)

366Gold Coast

5,601

Far West and Orana

356

Sydney - North Sydney and Hornsby

5,444

Mandurah336

Melbourne - North West5,399

West and North West294

Brisbane - South

5,084

Darling Downs - Maranoa

265

Sydney - South West4,667South Australia - Outback

193

Perth - South East

4,558

Queensland - Outback

180

Melbourne - Outer East

4,374

Northern Territory - Outback

176

Sydney - Blacktown

4,336

Barossa - Yorke - Mid North

172

Brisbane Inner City

4,192

South East123

Top 20 Regions

Bottom 20 Regions

Source: ABS© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

7

THE STATE OF RENTAL SUPPLY AND COVID-19
At the same time that localised reductions in rental demand emerge, there areseveral factors which have contributed to an increase in the supply of rental listings.
Moreover, the uplift in rental supply stock also appears to be quite a localised
phenomenon.

45%
40%

36.4%

35%
30%
25%

ay
-1
6

ay
-1
8

M

M

M

ay
-1
4

ay
-2
0

25.0%

20%
M

Developer activity increased significantly to accommodate
the demand from investors, particularly in the unit
segment. In the 12 months to August 2016, unit approvals
peaked at 123,404, which was 42.5% above the decade
average. This contributed to a surge in rental listings, anda gradual loosening of rental market conditions insome markets.

50%

ay
-1
2

New housing finance for investment purchases peaked
at $10.1 billion in April 2015. Prior to this, the series
average for lending to investors was $5.8 billion permonth. This surge in investment activity slowed amid theimplementation of macro-prudential policy announcedin December 2014 that restricted lenders to growing theirinvestor book by less than 10% per annum. However, thiswas followed by a second period of elevated investment
between early 2016 and 2017.

INVESTOR HOUSING FINANCE COMMITMENTS AS
A % OF TOTAL HOUSING FINANCE COMMITMENTS(BASED ON VALUE EXCL- REFI)

M

Investor finance for the purchase of property surged fromlate 2012, partly due to a rate cutting cycle that saw the
cash rate target fall from 4.25% from the start of 2012 tojust 1.5% by August 2016.

If investor participation remains low, this could keep rental
market conditions relatively steady. It signals that the fallaway in demand will be met with less new supply.

ay
-1
0

Source: ABS

08

ay
-1
8
M

ay
-2
0

ay
-1
6
M

M

ay
-1
4
M

ay
M

ay
-1
0
M
ay
-1
2

08

ay
M

M

ay
M

06

04

$3,000M$4,101$4,000ay-$5,000

It is fortunate that in the lead up to COVID-19, investment
participation in the property market had been correctingfrom very high levels. It means that more property was
being purchased by owner-occupiers, who may beless likely to offload property assets amid economic
uncertainty, thus reducing some overall risk to theproperty market.

06$6,000M$7,000ay-$9,000$8,00004$10,000

M$11,000

More recently, much of 2019 and early 2020 saw a
gradual reversal of earlier trends. A withdrawal in investor
participation in the housing market occurred in response
to tightened lending conditions designed to limit
potentially risky housing lending. In September 2017,
APRA implemented a 30% cap on the share of banks’ newlending that was interest only, a loan structure largely
utilised by investors7. The graph below shows that fromthis period, investor lending trended lower to reach record
lows.

ay
-

MONTHLY VALUE OF INVESTOR HOUSING FINANCE
COMMITMENTS ($ MILLION)

The CoreLogic hedonic rental value index, which tracks
changes in estimated rent values, shows that over thisperiod rents did not fall on a national level. However,annual growth in rents did bottom out at a very weak
0.5% at July 2016.

M

ABS finance data provides useful context in understanding
the state of investor participation, and the subsequentdelivery of new rental supply, in the lead up to COVID-19.
The graph below shows the monthly value of new financesecured for housing investment lending across Australia.

Source: ABS

7. APRA. (2017). Residential mortgages: Update on interest-only lending. APRA Insight – Issue 4 2017.
https://www.apra.gov.au/apra-insight-issue-4-2017#interest-only-benchmark.
© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

8

NUMBER OF HOUSES UNDER CONSTRUCTION,
MAJOR STATES

However, ABS building activity data suggests that even
as approvals and commencements are moderating, there
is still an above-average level of units under construction
across Victoria and NSW. At March 2020, the numberof units under construction was 18.8% higher than thedecade average across NSW, and 24.0% higher acrossVictoria. This poses added risk to future return within theseunit markets.

30,00025,00020,00015,000AIRBNB – FROM SHORT TERM, TO LONG
TERM, AND BACK AGAIN

10,000
5,000

ar
-1
6

ar
-1
8

M

M

QLD

ar
-2
0

ar
-1
4
M

VIC

NSW

M

ar
-1
2
M

ar
-1
0

ar
-0
M

8

ar
-0
M

M

6

0

SA

WA

Source: ABS
NUMBER OF UNITS UNDER CONSTRUCTION,
MAJOR STATES

80,00070,000

Another factor contributing to increased rental supply is
the conversion of short term accommodation, namely
Airbnb, to the long-term rental market. This has been
supported anecdotally, with real estate agents reportingthat they have assisted Airbnb owners to market theirproperty for a longer-term tenant8.
Researchers from the University of Queensland estimate
346,581 unique properties, or about 4% of the country’s
housing stock, had been used for Airbnb at some point
between July 2016 and February 2019. The highest countsof Airbnb listings by SA2 region were in Melbourne,
Surfers Paradise, Point Nepean, Byron Bay and theSydney-Haymarket-The Rocks region9. Additional stockfrom the conversion of holiday homes to longer-term
tenure would ease rental prices.
However, the switch from Airbnb to longer term leasing islikely to be temporary. ‘Long term’ tenancies in Australia
are relatively short, at 6-12 months, and landlords may
see much higher revenues from Airbnb, particularly intourism-centred markets. As domestic and international
travel resumes, landlords may be keen to revert properties
back to short-term holiday accommodation soon after the
longer-term lease period expires.

60,00050,00040,00030,00020,00010,000

VIC

ar
-1
6

ar
-1
8

M

M

WA

ar
-2
0

ar
-1
4
M

QLD

M

ar
-1
2
M

ar
-1
0

ar
-0
M

NSW

M

ar
-0
M

8

6

0

SA

Source: ABS

8. Derwin, J. (March 25th 2020). Airbnb properties are flooding back onto the rental market across Australia, as short-term visitors dry up due to coronavirus travel
restrictions. Business Insider AU. https://www.businessinsider.com.au/coronavirus-airbnb-rents-impact-rental-market-australia-2020-3.
9. Sigler, T., & Panczak, R. (2020). Ever wondered how many Airbnbs Australia has and where they all are? We have the answers. The Conversation.
https://theconversation.com/ever-wondered-how-many-airbnbs-australia-has-and-where-they-all-are-we-have-the-answers-129003.
© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

9

CORELOGIC RENTAL LISTINGSNUMBER OF NEW RENTAL LISTINGS, COMBINEDCAPITAL CITIES DWELLINGSIn assessing the state of rental supply, it is useful toconsider changes in the level of advertised stock.
CoreLogic rental listings are calculated on a rolling, 28-day
basis. A count of the unique total and newly advertised
property for rent across the capital city markets is
considered.

60,00050,00040,000A summary of new and total rent listings across the
combined capital cities is summarised in the graphs to theright of this page.

30,14830,00020,000Interestingly, though rent listings have seen a rise involumes over the past few weeks, they are still relatively
low compared with the equivalent 28-day period in 2019.
Total rent listings on market across the combined capitalcities were down 15.3% compared with the same period
in 2019, as investor participation in the housing market
reached record lows in early 2020. However, the pile-up in
rental stock amid COVID-19 is demonstrated by the factthat this gap is narrowing: the average gap between total
listings volumes in 2019 and 2020 to May was -23.2%.

10,000

As of June 2020

2017

2016

c

v

De

ct

No

p

2018

O

g

Se

ly

Au

n

Ju

Ju

r

ay
M

ar

b

Ap

M

Fe

Ja

n

0

2020

2019

Source: CoreLogic

NUMBER OF TOTAL RENTAL LISTINGS, COMBINEDCAPITAL CITIES DWELLINGS

New rent listings across the combined capital cities
increased 2.2% between the 28 days ending 28th of June,
and the 28 days ending 31st of May. Total rent listings
declined 3.7% in the same period. This suggests that there
was an increase in the level of new listings coming tomarket over May, but that total rental stock had a periodof stabilisation. This may be either through demand
increasing slightly over June, or vacant rental stock being
withdrawn from the market.

140,000
120,000
100,000
83,79380,00060,000Notably, most of the build-up in rental listings is occurringin Sydney and Melbourne. The graph below shows thechange in total rent listings counted in the 28-days toMarch 15, as Australia reached its 100th case of COVID-19,
versus the 28-days ending 28th of June. Between these
periods, rent listings across Melbourne rose by 3,730,
Sydney rent listings rose by 1,043, and other capital cities
saw a decline in rent listings on the whole.

40,00020,000

As of June 2020

2017

2016

c

v

De

ct

No

p

2018

O

g

Se

ly
Ju

Au

n
Ju

r

ay
M

ar

b

Ap

M

Fe

Ja

n

0

2020

2019

Source: CoreLogic

CHANGE IN TOTAL AND NEW RENT LISTINGS BETWEEN 4 WEEKS ENDING MARCH 15TH AND JUNE 28TH
20%

16.3%

15%
10%
5%

9.6%
5.6%

3.4%

0.9%

0%
-0.3%

-0.8%

-5%

-3.8%

-10%

-7.6%
-11.5%-15%-11.8%-15.9%-20%-25%-17.4%-22.4%-23.4%-23.5%-30%-28.7%-35%-40%-38.6%-45%-50%

Melbourne

SydneyTotal rent listings

ACT
New rent listings

Brisbane

HobartAdelaide

PerthDarwinCombined
Capitals

Source: CoreLogic© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

10

The differences across rental markets is crucially importantto understand, because it empowers tenants and landlordsin negotiating rents based on local conditions. It also
highlights that the ‘Australian’ rental market is comprised ofmany markets with highly different dynamics.

Breaking down rental listings by SA4 region shows asimilar trend, where rent listings have seen a significant
accumulation across inner-city Sydney and Melbourne.
Of the 88 SA4 regions for which total rent listings arecounted, only 11 regions have seen an increase over themeasurement periods. These 11 areas are relatively large
rental markets however, accounting for 30.8% of estimatedrental stock in Australia. 8 of the 11 regions are locatedacross Sydney and Melbourne. Other regions recording an
increase in rental listings include the Adelaide – Centraland Hills Region, the Gold Coast and Brisbane Inner City.
The increase in listings across the Gold Coast, which wereup 5.1% between the two periods measured, may reflect
the conversion of holiday accommodation to the longerterm rental market.

This is reinforced by the rental demand factors discussed
in the earlier section of this report, where variations in
exposure to net overseas migration and precarious work
are likely leading to variations in surplus rental stock.
The following section provides insight into changes inrental values and yields, which also reflects increased
supply in these regions putting downward pressure on
rental prices.

TABLE 1: RENT LISTINGS SA4SA4 Region Name

Total Listings Count 28 days to 15th of March

Total Listings Count 28 days to 28th of June

Change in Total Listings

Melbourne - Inner

7,011

11,01957.2%

Sydney - City and Inner South

3,611

5,530

53.1%

Sydney - Eastern Suburbs

2,189

3,094

41.3%

Melbourne - Inner East

1,990

2,382

19.7%

Melbourne - Inner South

2,218

2,654

19.7%

Sydney - Inner West

2,421

2,729

12.7%

Brisbane Inner City

2,426

2,665

9.9%

Sydney - North Sydney and Hornsby

3,104

3,293

6.1%

Adelaide - Central and Hills

1,060

1,116

5.3%

Gold Coast

2,832

2,977

5.1%

Sydney - Ryde

1,531

1,591

3.9%

Australian Capital Territory

898

891

-0.8%

Melbourne - North West

1,349

1,290

-4.4%

Sydney - Parramatta

3,954

3,753

-5.1%

Geelong

962

912

-5.2%

Melbourne - West

3,291

3,107

-5.6%

Sydney - Inner South West

3,546

3,342

-5.8%

Warrnambool and South West

278

260

-6.5%

Sydney - Northern Beaches

1,141

1,054

-7.6%

Brisbane - South

1,816

1,671

-8.0%

Perth - Inner

2,206

2,026

-8.2%

Melbourne - South East

2,980

2,706

-9.2%

Sydney - Sutherland

627

563

-10.2%

Sydney - South West

1,960

1,756

-10.4%

Central West

920

824

-10.4%

Sydney - Baulkham Hills and
Hawkesbury

783

701

-10.5%© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

11

SA4 Region Name

Total Listings Count 28 days to 15th of March

Total Listings Count 28 days to 28th of June

Change in Total Listings

Melbourne - Outer East

1,138

1,017

-10.6%

Hobart644

568-11.8%

Melbourne - North East

1,975

1,735

-12.2%

Brisbane - West

852

741

-13.0%

Latrobe - Gippsland

864

750

-13.2%South East8674

-14.0%

West and North West

243

209

-14.0%Sunshine Coast

1,550

1,324

-14.6%

Brisbane - North

1,116

942

-15.6%

Newcastle and Lake Macquarie

1,335

1,114

-16.6%

Murray380

312-17.9%

Brisbane - East

794

648

-18.4%

Ipswich

1,590

1,296

-18.5%

North West

345

281

-18.6%

Sydney - Blacktown

2,111

1,702

-19.4%

Richmond - Tweed

941

750

-20.3%

Illawarra

1,288

1,024

-20.5%

Hume

409

324

-20.8%

Perth - South East

2,830

2,241

-20.8%

Adelaide - West

749

593

-20.8%

Logan - Beaudesert

1,663

1,316

-20.9%

Coffs Harbour - Grafton

896

706

-21.2%

Launceston and North East

584

459

-21.4%

Moreton Bay - North

1,076

845

-21.5%New England and North West

906

706

-22.1%

Cairns

1,384

1,066

-23.0%South Australia - South East

764

585

-23.4%

Moreton Bay - South

785

599

-23.7%

Northern Territory - Outback

289

220

-23.9%

Mornington Peninsula

941

713

-24.2%

Ballarat

730

550-24.7%Shepparton

368

277

-24.7%

Adelaide - North

1,092

820

-24.9%

Western Australia - Outback (South)

822

617

-24.9%

Barossa - Yorke - Mid North

207

155

-25.1%Southern Highlands and Shoalhaven

924

691

-25.2%

Perth - North East

1,193

890

-25.4%

Hunter Valley exc Newcastle

1,023

763

-25.4%

Mackay - Isaac - Whitsunday

1,022

761

-25.5%

Sydney - Outer South West

958

711

-25.8%

Bendigo591

437-26.1%

Adelaide - South

874

646

-26.1%© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

12

SA4 Region Name

Total Listings Count 28 days to 15th of March

Total Listings Count 28 days to 28th of June

Change in Total Listings

Perth - South West

2,404

1,764

-26.6%

Sydney - Outer West and Blue
Mountains

1,539

1,128

-26.7%

Western Australia - Wheat Belt

539

390

-27.6%

Bunbury922

662-28.2%

Darwin934

666-28.7%Mid North Coast

1,008

717

-28.9%

Perth - North West

2,537

1,804

-28.9%

Queensland - Outback

280

198

-29.3%

Darling Downs - Maranoa

573

405

-29.3%

Central Coast

1,449

1,020

-29.6%

Central Queensland

1,280

899

-29.8%

Mandurah666

455-31.7%

Capital Region

849

572

-32.6%

Wide Bay

1,086

725

-33.2%

Townsville

1,528

996

-34.8%

Toowoomba

775

504

-35.0%

Far West and Orana

572

371

-35.1%

Riverina

757

490-35.3%South Australia - Outback

485

313

-35.5%

Western Australia - Outback (North)

747

468

-37.3%© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

13

RENTAL MARKET METRICSRENTAL VALUES AND AFFORDABILITY
Rental affordability in the lead up to COVID-19 is captured by the proportion of household income required to service rent.
Utilising household income data together with the median weekly rental payment, the percentage of gross annual household
is required to pay the rent is calculated. For example, a household earning $100,000 per annum in a city where the median
weekly rent is $500 would be dedicating 26% of their gross annual household income towards paying their landlord.
Household income data for this metric is provided by the ANU Centre for Social Research and Methods.
A summary of the portion of income required to service rent is provided across Australian regions below.
PORTION OF INCOME REQUIRED TO SERVICE RENT - CAPITAL CITY DWELLING MARKETS

36%

36%

34%

34%

32%

32%
30.7%

28%
26%
24%

30%

27.7%
26.7%

28%

24.1%

24%

26%

Brisbane

M

M

M

Melbourne

25.0%

20.7%

ar
-1
0
ar
-11
M
ar
-1
2
M
ar
-1
3
M
ar
-1
4
M
ar
-1
5
M
ar
-1
6
M
ar
-1
7
M
ar
-1
8
M
ar
-1
9
M
ar
-2
0

22%
20%

ar
-1
0
ar
-11
M
ar
-1
2
M
ar
-1
3
M
ar
-1
4
M
ar
-1
5
M
ar
-1
6
M
ar
-1
7
M
ar
-1
8
M
ar
-1
9
M
ar
-2
0

22%
20%

Sydney

29.2%

Perth

M

30%

34.0%

Adelaide

HobartDarwinACTTABLE 2: PORTION OF INCOME TO SERVICE RENT PAYMENT - DATA TO MARCH 2020

Sydney Melbourne

Brisbane

Adelaide

Perth Hobart Darwin Canberra

Combined Combined
capitals regionals

National

All Dwellings
Mar-20 Quarter

30.7%

27.7%

26.7%

29.2%

24.1%

34.0%

20.7%

25.0%

27.4%

30.3%

28.5%

Dec-19 Quarter

30.5%

27.5%

26.5%

29.1%

23.7%

33.9%

20.5%

24.2%

27.3%

30.0%

28.3%

Mar-19 Quarter

31.8%

27.8%

26.9%

29.0%

23.6%

33.9%

20.9%

24.5%

27.6%

30.1%

28.5%

HousesMar-20 Quarter

33.5%

28.0%

28.0%

30.0%

24.1%

35.1%

22.9%

25.7%

27.8%

30.4%

28.4%

Dec-19 Quarter

32.3%

27.6%

27.8%

30.0%

24.0%

34.9%

22.2%

25.4%

27.4%

30.5%

28.2%

Mar-19 Quarter

32.4%

27.7%

28.0%

30.2%

24.5%

35.0%

22.4%

26.4%

27.6%

30.7%

28.5%

Units
Mar-20 Quarter

31.8%

27.8%

26.9%

29.0%

23.6%

33.9%

20.9%

24.5%

27.3%

28.9%

28.7%

Dec-19 Quarter

30.5%

27.5%

26.5%

29.1%

23.7%

33.9%

20.5%

24.2%

27.1%

27.9%

28.4%

Mar-19 Quarter

30.7%

27.7%

26.7%

29.2%

24.1%

34.0%

20.7%

25.0%

27.2%

28.9%

28.6%

© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

14

Rent value growth is measured using changes in the CoreLogic Hedonic Rental Value Index. The rental value index measureschanges over time in the total value of estimated rents in a market.
Growth in rental values has been weak across some of the larger capital city markets over the past few years. This is
symptomatic of the surge in investment and housing development that occurred between 2012 and 2017, particularly acrossSydney, Melbourne and Brisbane.
ANNUAL GROWTH IN HEDONIC RENTAL INDICIES ­— CAPITAL CITY DWELLING MARKETS

18%

18%

13%

Adelaide
2.2%

13%

8%

Perth
2.2%

8%

Brisbane
0.6%

3%Melbourne
0.0%

-2%

Sydney-1.0%-7%Canberra
1.4%

3%

Hobart-0.1%-2%

Darwin
-1.0%

-7%

Perth

Adelaide

Brisbane

Hobart

n18
Ju

n20

n16
Ju

Darwin

Ju

n14
Ju

n12
Ju

n10
Ju

n18
Ju

Melbourne

n20

n16
Ju

Sydney

Ju

n14
Ju

Ju

Ju

n12

-12%

n10

-12%

Canberra

TABLE 3: RENTAL VALUES SUMMARY - DATA TO JUNE 2020

Sydney Melbourne

Brisbane

Adelaide

Perth Hobart Darwin Canberra

Combined Combined
capitals regionals

National

All Dwellings
Median rent

$525

$440

$400

$380

$375

$440

$400

$515

$460

$380

$450

Monthly change

-0.8%

-0.6%

-0.1%

0.2%

0.3%

-0.9%

0.3%

-0.1%

-0.4%

0.1%

-0.3%

Change since
March

-1.3%

-1.0%

-0.6%

0.1%

0.9%

-2.3%

-0.1%

-0.4%

-0.7%

0.2%

-0.5%

Year-on-Yearchange

-1.0%

0.0%

0.6%

2.2%

2.2%

-0.1%

-1.0%

1.4%

0.2%

2.1%

0.7%

HousesMedian rent

$550

$440

$420

$395

$380

$460

$460

$590

$450

$390

$430

Monthly change

-0.6%

-0.3%

0.0%

0.2%

0.4%

-0.6%

0.4%

0.0%

-0.2%

0.1%

-0.1%

Change since
March

-0.7%

-0.3%

-0.4%

0.2%

1.0%

-2.0%

0.1%

-0.3%

-0.2%

0.2%

-0.1%

Year-on-Yearchange

-0.2%

1.4%

1.1%

2.4%

2.3%

0.0%

-1.9%

1.5%

1.0%

2.3%

1.4%

Units
Median rent

$520

$440

$395

$350

$360

$400

$370

$480

$470

$360

$450

Monthly change

-1.1%

-1.1%

-0.4%

0.0%

0.0%

-1.8%

0.0%

-0.5%

-0.9%

0.0%

-0.8%

Change since
March

-2.1%

-2.0%

-1.0%

-0.2%

0.1%

-3.7%

-0.3%

-0.7%

-1.8%

0.3%

-1.4%

Year-on-Yearchange

-2.1%

-1.9%

-0.8%

1.5%

1.2%

-0.5%

0.4%

1.2%

-1.5%

1.5%

-1.0%

© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

15

Annualised growth in the combined capital city rental
market values was just 0.9% over the past 5 years.
This is more subdued than wages growth and inflation,suggesting a shift towards improved affordability
for renters.
Over 2019, rental values began tightening as investment
and development slowed. In March, annual growthin Sydney rents rose for the first time since May 2018.
However, COVID-19 has started to shift this dynamic, withdwelling rents falling 1.3% across Sydney since March, led
by a 2.1% decline in Sydney unit rents.
As may be expected, the Sydney regions with the steepest
decline in rental values between March and June are theCity and Inner South (-4.1%), followed by Sydney’s Eastern
Suburbs (-3.7%).
Melbourne and Brisbane rental values have seen steadierperformance in the past few years. Across Melbourne,
this has been supported by historically high internationalmigration. Over 2018-19, ABS migration data records
Melbourne having the highest number of net overseas
migrants of the capital cities, at 77,369. The pause
on international migration has so far contributed to
Melbourne rents slipping 1.0%, driven by a 2.0% decline inunit rents, while house rents declined by a smaller 0.3%.

In smaller regions like the ACT and Hobart, rent values
were already seeing downward pressure in the lead up
to COVID-19 as a result of affordability constraints for therenting population.
Rent values across Hobart have seen the steepest rate of
decline of the capital markets from March to June, falling
2.3% over the period. For Hobart in particular, where rental
markets have been the most unaffordable of the capitalcities since December 2018, the compounding effects
of COVID-19 on rental supply could be a great relief
for tenants.
It is important to note that even while rents have fallen in
the past three months, this does not mean that dwellings
will become more affordable for renters. This is because of
the significant income losses over the period. ABS analysis
of Single Touch Payroll data indicates that total wages paid
between the 14th of March and 13th of June fell 6.3%.
Rental affordability already showed signs of worsening
in 4 of the 8 capital city markets over the year to March
2020. Affordability may deteriorate further in the coming
quarters due to job and income loss. For renters who areless affected, or unaffected by the COVID-19 downturn,affordability may improve markedly, depending on theregion in which they are located.

The Brisbane rent market has had the weakest growth
in rent values outside of Sydney, Perth and Darwin, withannualised rental value growth of 0.6% over the past
5 years.
This is largely the result of a high influx of investor grade
stock over 2016, when units were being built acrossBrisbane at an unprecedented level. ABS completion datasuggests 21,342 units were completed, against a historic
average of 11,585 per year. As completions moderated andinterstate migration lifted, Brisbane rental values gradually
gained momentum. However, COVID-19 has seen areversal of this trend since March, particularly across theinner city market, where rents are down 0.9%.

© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

16

WHERE ARE TENANTS MOST LIKELY TO NEGOTIATE LOWER RENTS?
Rental markets are proving to be highly varied in the current climate. The following section uses suburb-level data to identify
where tenants may be most successful in negotiating reduced rental rates with landlords, based on estimated reductions in
the total rental market value.
The following table draws on the ‘top 10’ suburbs by rental value declines between March and June across capital cities,
where there were at least 10 listings in the suburb at the points of measurement.

TABLE 4: CAPITAL CITY SUBURBS THAT HAVE SEEN THE LARGEST FALL IN RENTS

RegionACT

Adelaide

BrisbaneDarwinSuburb Name

Change in rents 31st of March to 30th of June

Number of listings counted
in JuneMedian rent
value - June

Kingston

-2.2%

111

$554

Barton

-1.9%

36

$595

Forde

-1.7%

12

$660

Campbell

-1.6%

37

$728

City

-1.6%

96

$608

Dickson

-1.6%

25

$559

Griffith

-1.4%

62

$531

Watson

-1.3%

32

$510

O'Connor

-1.1%

19

$687

Gungahlin

-1.0%

53

$554

Goodwood

-2.8%

12

$494

North Adelaide

-2.3%

82

$436

Adelaide

-2.2%

404

$450

Unley

-2.0%

18

$507

Fullarton

-1.4%

14

$503

Parkside

-1.4%

25

$506

St Peters

-1.2%

15

$519

Windsor Gardens

-1.1%

19

$388

Norwood

-1.1%

56

$462

Largs North

-1.0%

13

$402

Brisbane City

-3.6%

428

$498

South Brisbane

-3.3%

269

$487

Hawthorne

-3.1%

42

$538

Fortitude Valley

-3.1%

156

$416

Spring Hill

-3.0%

166

$430

West End

-2.9%

153

$498

Highgate Hill

-2.4%

55

$469

Robertson

-2.3%

14

$531

Balmoral

-2.2%

27

$528

Salisbury

-2.2%

27

$437

Gray

-1.3%

18

$368

Nightcliff

-0.9%

30

$383

Millner

-0.8%

13

$372

Bakewell

-0.6%

26

$372

Coconut Grove

-0.6%

28

$345

Karama

-0.6%

13

$419

Leanyer

-0.5%

17

$452

Muirhead

-0.5%

12

$588

Wagaman

-0.4%

11

$423

Rosebery

-0.4%

31

$473

© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

17

RegionHobartMelbourne

PerthSydneySuburb Name

Change in rents 31st of March to 30th of June

Number of listings counted
in JuneMedian rent
value - June

Battery Point

-5.6%

37

$536

South Hobart

-4.8%

16

$509

Lenah Valley

-4.8%

13

$478

North Hobart

-4.7%

21

$516

New Town

-4.7%

27

$500

Hobart

-4.7%

39

$523

Sandy Bay

-4.7%

66

$553

West Hobart

-4.0%

23

$532

Kingston

-2.6%

22

$479

Bellerive

-2.4%

16

$473

Southbank

-7.0%

1554

$525

Melbourne

-6.9%

2678

$528

Docklands

-6.5%

661

$547

Carlton

-5.8%

533

$452

West Melbourne

-5.3%

234

$481

North Melbourne

-4.4%

265

$466

Parkville

-4.2%

88

$446

East Melbourne

-4.0%

109

$555

Port Melbourne

-3.9%

299

$623

Albert Park

-3.7%

60

$756

Shelley

-1.3%

13

$448

Dalkeith

-1.0%

11

$955

Crawley

-1.0%

44

$466

Burswood

-0.9%

39

$428

North Coogee

-0.7%

27

$469

Wilson

-0.6%

45

$380

Riverton

-0.5%

26

$432

High Wycombe

-0.4%

34

$399

Byford

-0.4%

36

$373

Victoria Park

-0.4%

88

$396

Haymarket

-7.2%

333

$748

Barangaroo

-7.0%

11

$890

Sydney

-6.9%

719

$681

Millers Point

-6.8%

42

$831

the Rocks

-6.7%

14

$726

Kingsford

-5.8%

289

$656

Ultimo

-5.0%

249

$624

South Coogee

-4.9%

21

$1,014

Zetland

-4.9%

429

$693

Pyrmont

-4.8%

417

$698

Sydney, Melbourne and Hobart have seen the individual suburbs with the largest value declines. Among the top 20 suburbs
across the capital cities for rental declines, 11 were located in Sydney, 5 were located in Melbourne, and 5 were suburbsof Hobart.
The largest decline in rental values has occurred across Haymarket in Sydney, where suburb rents fell -7.2% in the June quarter.
This was followed by the suburb of Barangaroo in Sydney and Southbank in Melbourne, where rents in each suburb fell 7.0%.
While many of the suburbs reflect the characteristics explored earlier in the report, it is interesting that some relatively highsocio-economic suburbs appear on the list. This includes The Rocks in Sydney, Perth’s Dalkeith, and Albert Park in Melbourne.
However, overall there does not appear to be a significant relationship between percentage value declines and rental values.
While this data can empower tenant decisions, an individual’s affordability will largely be determined by their ability to keep
their job, or at least maintain a base level of income in the current downturn, making rental affordability a greater function ofindustry of employment and location.
© Copyright 2020. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.

18

RENTAL YIELD PERFORMANCEGROSS RENTAL YIELDS — AUSTRALIAN DWELLING MARKETS

6%

7%

5.5%

6%

5%

5%

4.5%
4%

4%

3%

3.5%

SydneyMelbourne

Brisbane

Combined capitals

PerthAdelaide

HobartCombined regionals

DarwinCanberra

n18
Ju

n20

n16
Ju

Ju

n14
Ju

Ju

n10
Ju

n20
Ju

n18

n16
Ju

Ju

n14
Ju

n12
Ju

n10
Ju

n12

3%

2%

TABLE 5: GROSS RENTAL YIELDS - DATA TO JUNE 2020

Sydney Melbourne

Brisbane

Adelaide

Perth Hobart Darwin Canberra

Combined Combined
capitals regionals

National

All Dwellings
Current yield

2.9%

3.2%

4.4%

4.4%

4.4%

4.7%

5.9%

4.7%

3.4%

4.9%

3.7%

Yield
12 mths ago

3.5%

3.7%

4.6%

4.5%

4.4%

5.3%

6.0%

4.8%

3.9%

5.1%

4.1%

Current yield

2.7%

2.8%

4.2%

4.2%

4.3%

4.7%

5.4%

4.4%

3.3%

4.9%

3.6%

Yield
12 mths ago

3.2%

3.3%

4.4%

4.3%

4.2%

5.2%

5.7%

4.5%

3.7%

5.1%

4.0%

Current yield

3.4%

3.9%

5.2%

5.3%

5.2%

4.8%

6.8%

5.8%

3.9%

5.2%

4.0%

Yield
12 mths ago

4.0%

4.5%

5.5%

5.4%

5.2%

5.4%

6.7%

5.8%

4.4%

5.5%

4.6%

HousesUnits

Rental yields have remained relatively steady, albeit around historically low levels amid COVID-19 at the aggregate level.
Across Australia, typical gross rental yields were 3.7% in June, which was relatively steady on March, but had compressed about
40 basis points from June 2019. This was largely a function of property values moving 7.8% higher year on year while rental
rates held reasonably firm.
Across the combined capital cities, gross rental yields are recorded at 3.4%, which was steady on yields in March, and43 basis points below June last year. Gross yields across the combined regional markets also declined over the year, but by just
21 basis points. This leaves regional rent yields at a relatively strong 4.9%.
Gross rental yields across the individual capital cities at the end of June 2020 were recorded at 2.9% in Sydney (a record low),
3.2% in Melbourne, 4.4% in Brisbane, 4.4% in Adelaide, 4.4% in Perth, 4.7% in Hobart, 5.9% in Darwin and 4.7% in Canberra.
The low yields in Sydney and Melbourne are unlikely to improve as dwelling values are tested in the coming months.
Investors should note that inner-city unit markets pose a particular risk in the current environment, with rental values likely
to fall alongside property values.
Overall, rent yields have been steadily falling across capital city markets amid the upswing in dwelling values across Australia
between June 2019 and the start of 2020. Rental yields may be steady or compress slightly more in the coming months, asboth property values and rent values are likely to see a decline.

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