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Post-election we have witnessed the property market continuing to improve across a broad range of properties as confidence continues to rise.
Depending what commentator you are listening to the market varies in strength from area to area. Certainly Sydney, Melbourne and Canberra are seeing good recovery and growth while regional areas are far more variable in growth levels.
Following are some facts from RP Data:
Michael Matuzik in his Matuzik Missive of 14 October made the following comments on the rental market:
Where has all the rental growth gone?
According to Australian Property Monitors, rental growth across much of Australia is now flat & is expected to remain so for some time to come. I agree.
Rents rose about 1 per cent during the September quarter, which is way down on previous results.
Some of the explanations as to why rental growth is being shunned, seem a little askew, if you ask me – first home buyers buying not renting; increasing supply of property for rent & an oversupply of new housing.
“My experience – both professionally & as a property investor – is that rents rise because landlords increase them. They increase them, not because they can, but because they have to, from a financial return point of view. This happens more often than not when interest rates rise.
Lower interest rates reduce the cost of holding investment property, so instead of potentially losing a tenant (especially a good one) many landlords, including myself, are not increasing rents at present. This, I think, will remain the case whilst interest rates remain low. Remember, most residential investors negatively gear.
“According to the ABS there are 2.6 million rental household across Australia. Only half of these properties are managed by real estate agents. A quarter are being rented from a parent or other relative. A third are supplied by a government body or community/church group.”
Locally we are experiencing a low vacancy factor and rents are firming as opposed to a few months ago where they were more volatile.
As always if you wish to discuss your real estate needs please feel free to call our office and speak with one of our specialist property consultants.