Steven Deare
(Australian Associated Press)

Rents across Australia fell by 0.5 per cent in the June quarter in the biggest drop since the September 2018 quarter, as coronavirus-related lockdowns caused reduced demand.

Landlords have had a harder time retaining tenants amid the impact of COVID-19 restrictions, as people have lost jobs and moved, or asked for payments to be lowered or suspended.

People in capital cities have felt the impact acutely. Rents across eight capital cities dropped 0.7 per cent compared to a 0.2 per cent rise in regional areas, according to data from property consultancy CoreLogic.

CoreLogic head of research Eliza Owen expects rents to fall further.

She said the closing of Australia’s international borders has starved landlords of demand from new migrants, who have historically been renters.

Job losses in industries such as hospitality, tourism and the arts have also made a difference as these workers were more likely to rent, she said.

Among capital cities, Hobart had the largest drop in rents for the quarter, down 2.3 per cent. Sydney had the next highest decline, 1.3 per cent.

Tenants in Adelaide and Perth have experienced the biggest increases in rent. Their payments climbed 2.2 per cent over the 12 months to June.