HOUSE rents have begun crashing in Brisbane suburbs where major apartment developments have gone up, latest data shows.
South Brisbane, where the majority of inner city apartment developments have concentrated in recent times, logged the second highest crash in rental rates for houses in the Queensland capital. Median house rents there dropped by a third (-31.1 per cent) to $365 a week.
New Farm, which has also seen significant apartment development activity, logged the fourth highest drop in house rents in Brisbane, falling by a fifth to $600 a week (-21.1 per cent).
Analysis firm CoreLogic RP Data released the information today in its listing of the top five capital city suburbs for rental rate falls for the 12 month to April this year.
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The biggest fall in house rents in Brisbane came out of Pinkenba where the median rent dropped -36.7 per cent to $285 a week. Ellen Grove saw the third highest fall, down -24.4 per cent to $310 per week, while leafy upmarket Pullenvale has also struggled as the mining downturn drains the city of executives, with houses rents down -15 per cent to $850 a week.
Despite the heavy supply of new units coming onstream, the top five falls in the unit rental market were not as drastic as that of houses.
Mount Ommaney has the highest drop in median weekly rent for units, falling -13.5 per cent to $545, with Robertson second, down -11.9 per cent to $370.
But there were signs that inner city suburbs were feeling the pinch, with Paddington’s median unit rental rate down 10 per cent to $405, Bardon down -9.5 per cent to $450 and Red Hill also falling 9 per cent to $378 a week.
The figures were taken off advertised rental rates over the 12 month period.
CoreLogic research analyst Cameron Kusher blamed the falls on substantial new housing supply, slowing population growth, weak wages growth and heightened level of purchasing by investors.
He said many premium suburbs had seen some of the largest falls in advertised rental rates over the past year.
“Whether this is due to fewer executive rents as population growth slows or previous renters taking advantage of record-low interest rates to borrow to purchase is unknown. What is clear is that demand for rental houses is easing and in a number of suburbs rental prices have fallen dramatically.”
He said with more rental supply set to enter the market over the coming years landlords may have to reduce their rents to keep tenants.
“Although the cost of purchasing a house is becoming increasingly unaffordable it seems that the cost of renting is set to become more affordable over the coming years.”