The recent surge in house price growth to record highs does not automatically mean rental growth is also set to take off. But a strong recovery in rental demand as cities reopen and households make delayed moves, coupled with low vacancy rates, mean rental growth will rise this year. From 1.9% y/y in June, we expect the rent of primary residence component of the CPI to rise to 2.5% by the end of the year, and 4.0% y/y by mid-2022.
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