The May CoreLogic Housing Value Index offers invaluable insights for rental property owners assessing Australia’s dynamic property market. The report highlights key trends, market dynamics, and opportunities that landlords should consider to optimise their investments and make informed decisions.

Market Performance and Growth Trends

The national home value index rose by 0.8% in May, marking the 16th consecutive month of growth. This growth was led by mid-sized capitals, with Perth at a 2.0% increase, followed by Adelaide at 1.8% and Brisbane at 1.4%. Sydney’s market showed resilience with a 0.6% rise. These trends suggest a robust property market, providing rental property owners with opportunities for capital appreciation.

Supply and Demand Dynamics

A critical factor driving these price increases is the low supply of available properties. In Perth and Adelaide, listings are more than 40% below the five-year average, while Brisbane’s listings are 34% below average. This scarcity of properties is contrasted by Hobart, where listings are 41% above the five-year average due to lower demand. For landlords, understanding these dynamics is crucial, as markets with low supply but high demand tend to offer better rental yields and lower vacancy rates.

Regional Market Highlights

Brisbane’s housing market has shown exceptional strength, overtaking Canberra to become the second-most expensive capital city in Australia. Brisbane’s median dwelling value reached $937,479 for houses and$615,429 for units. This shift underscores the city’s growing appeal and potential for rental property investors.

Conversely, Hobart and Darwin experienced declines in property values, with Hobart down by 0.5% and Darwin by 0.3%. These variations highlight the importance of regional market awareness for landlords. Investing in areas with consistent growth and demand can lead to more stable and lucrative rental income.

Rental Yield and Affordability

Rental yield is a critical consideration for property investors. The CoreLogic report highlights that despite high interest rates, the rental market remains robust. Nationally, rents have increased by 8.5% over the past year. In particular, Perth has seen significant rental growth at14.7%, making it an attractive market for landlords seeking high rental yields.

However, it’s important to balance rental income with tenant affordability.

The national dwelling value to income ratio has risen to 7.7, with the time required to save for a 20% deposit extending to 10.3 years. While this indicates strong property value growth, it also underscores the financial pressures on tenants. Landlords should consider sustainable rental pricing to maintain long-term tenant relationships and reduce turnover.

Outlook and Investment Strategies

New government initiatives aimed at boosting housing supply, such as significant funding for social and community housing and infrastructure support, could adversely influence market dynamics.

Gross rental yields nationally

gross rental