National dwelling values have fallen for the third consecutive month according to research by CoreLogic, with unit markets continuing to weaken. This is great news for buyers, as growth in rental values continues to surge across Australia’s unit markets, with national rents rising 1.3% in July.

As CoreLogic Economist, Kaytlin Ezzy noted “Units are relatively more affordable and attract strong investor activity, meaning value changes across the medium to high density sector are proving to be less volatile than the house segment. However, market factors including increased interest rates, lower consumer sentiment and higher cost of living, mean selling conditions for units have also shifted in favour of buyers.”

July’s result took national unit rents 3.7% higher over the three months to July and saw the 12 months to July (10.7%) overtake the year to June (10.0%) as the highest annual rental rise on record. This month also marks the third consecutive month where units have outperformed houses in monthly, quarterly, and annual growth, across both the combined capital and combined regional markets, as well as at the national level.

“A number of factors are driving demand for unit rentals including unit’s relative affordability. At approximately $493 per week, the average unit rental is still nearly $60 a week cheaper than the average rental value for a house ($552). While national units (10.7%) recorded larger annual percentage rises in rents compared to houses (9.5%), in dollar terms both markets saw weekly rents rise by approximately $48,” Ms Ezzy continued.

This growth trend has continued across the individual capital cities, with each capital recording stronger monthly rental increases across the medium to high density segment compared to the lower density sector.  Perth was the one exception, with both house and unit rents rising 0.8% over the month.

Brisbane recorded the strongest increase in unit rents, rising 4.4% over the three months to July, followed by Sydney (4.1%) and Melbourne (3.9%). Adelaide and Darwin both recorded a quarterly increase in rent of 3.8%, while Hobart and Perth saw rents rise 2.2% over the same period. Previously Australia’s most expensive unit rental capital, Canberra recorded the smallest quarterly increase in rents, up just 1.8% over the three months to July. Stronger growth across Sydney, saw its median rental value ($579 per week) rise above Canberra’s median ($578 per week) to become Australia's most expensive capital to rent a unit in.