The CoreLogic Hedonic Home Value Index results for November found that the average gross rental yield across combined capital city dwellings is now recorded at 3.2 per cent, down from 3.5 per cent a year ago, and 4.1 per cent five years ago.
The report noted that Sydney and Melbourne both have the lowest yield profile for detached housing, with an average of 2.8 per cent in both cities.
Commenting on the findings, head of research Tim Lawless said: “With rental markets remaining soft, it is likely there will be further yield compression across those markets where residential property values are rising.”
He pointed out that the only market segments where yields have improved over the past 12 months were Hobart and Canberra’s unit markets, where rental rates have shown a higher rate of growth than unit values.
“It appears as though the low yield profile is no deterrent to investors, with ABS housing finance data showing a consistent rise in finance commitments for investment purposes since May this year,” he said.
“Clearly investors are continuing to see housing as the preferred investment option, despite low yields and a mature growth cycle.”
Settled transactions slightly reverse downward tend
Although overall transaction numbers have improved, the CoreLogic research indicated that settled sales remain 9.6 per cent lower than a year prior.
Every state and territory has posted a decline in settled sales over the year, however the largest fall has been in Victoria with a 14.9 per cent year-on-year decline.
November also saw listing numbers increase notably, as the latest CoreLogic listing counts show there were approximately 113,500 properties advertised for sale over the past 28 days across the capital cities, which is 2.4 per cent higher than the same time last year.
However, according to Mr Lawless, the hottest property markets are still seeing listing numbers lower than a year ago.
“With real estate agent activity across CoreLogic platforms easing over the past two weeks, it suggests that we may have moved through the peak of new listings activity. Additionally, as we move into the first month of summer, the housing market is likely to remain active for another two weeks before we start to see the normal seasonal slowdown in buyer numbers,” he explained.