Australia REITs: Rising rental growth a potential demand driver for housing developers

研报英文原文证据摘录

Australia REITs: Rising rental growth a potential demand driver for housing developers

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15 Jul 2026 11:39:45 ET │ 14 pages

Australia REITs

Rising rental growth a potential demand driver for housing developers

CITI'S TAKE

Australian Real estate

Australian rental growth accelerated to ~7% annualized in June 2026

following May budget changes, with Sydney, Brisbane, and Perth leading Suraj Nebhani, CFA AC

gains. Despite this uptick, rental yields remain compressed at ~4% versus +61-2-8225-4829

mortgage costs exceeding 6%, creating a yield gap. Rising rents are suraj.nebhani@citi.com

expected to drive first-home buyers into the market while also improving

investor economics and potentially demand. Notably, investor preference Howard Penny

has shifted toward master-planned communities (MPC)—SGP's MPC sales +61-2-8225-4819

to investors jumped to ~36% from historical 20-25%. Near-term demand howard.penny@citi.com

weakness may persist through 3QCY26 as markets digest rate hikes, but Akshit Batrastabilizing rates and strengthening demand from buyers and investors

signal recovery into 4Q CY26/CY27. Buy ratings maintained on SGP +912242775184

(preferred) and MGR. akshit.batra@citi.com

Pace of rent growth picking up — As shown in the chart inside, data from Cotality

indicate rental growth has picked up, particularly in the June month, following the

budget changes in May 2026. Combined capital cities across Australia saw ~7%

annualised increase in rents in Jun 2026 month, higher than recent months. Among

the markets, Sydney, Brisbane, and Perth all saw ~7% increases, while Melbourne

rental increases were more benign at ~3%.

Rental growth still low, with gap persisting vs mortgage costs — As shown in