Canberra rents are "firmly in decline" with nearly nine out of 10 suburbs reporting a fall in weekly house rents, a new report has revealed.
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Of the 81 suburbs analysed by CoreLogic for house rents, 72 suburbs (89 per cent) experienced a decline in rental values in the three months to July.
CoreLogic found 35 of the 41 suburbs (85 per cent) analysed for unit rental values also saw a decline.
Not all suburbs were analysed as per CoreLogic's reporting methods, which excludes those with less than 20 rental observations.
Hobart was the only capital city with a higher rate of suburbs in decline, with 93 per cent of suburbs seeing a fall in rents.
For comparison, 19 per cent of Sydney suburbs anaylsed saw a decline in house rents and only 5 per cent in Melbourne.
While rental growth had eased in most capitals, Canberra rents were already well on their way down, CoreLogic head of research Eliza Owen said in the report.
Canberra was the only capital city to record an annual decline in house rents (down 4 per cent) and unit rents (down 0.5 per cent).
"Most rental markets are now seeing growth flatten out, or moving lower," Ms Owen said.
"Canberra rents are firmly in decline, and Hobart house rents look as though they will soon follow."
Canberra suburbs with the biggest declines
Chapman experienced the largest decline in house rents over the July quarter. Rental values fell 3.3 per cent over three months to a median of $741 per week.
House rents fell by 3 per cent in Farrer and Wanniassa to weekly rents of $806 and $672 respectively.
The steepest decline in unit rents was seen in Campbell, where rents fell 2.5 per cent to a median of $654 per week.
A 2.4 per cent decline was recorded for unit rents in Turner, down to $619 per week.
Hawker and Ngunnawal recorded declines of 1.9 per cent with median unit values sitting at $533 and $572 per week respectively.
Rent growth tipped to slow further in 2024
An easing of rental growth across the country was expected to be a key housing trend in 2024 and there were three reasons why, Ms Owen said.
Firstly, the major banks expect the cash rate to fall in 2024.
"A reduction in interest rates could increase demand from housing investors, and increased investment purchases add to rental supply, which may serve to lower rent growth," Ms Owen said.
Softer income growth could also prompt a change in housing preferences, she said.
"As income growth slows, renting households may look to adjust their housing situation, and re-form share houses," she said.
Finally, as rental affordability becomes stretched households may move to more affordable areas, slowing rental growth further.
"... renters also tend to be on lower incomes, which means there could be a ceiling on how high rents can go before tenants adjust their housing preferences," Ms Owen said.
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