Newsletter Feb 2012
Tuesday, January 31, 2012
Newsletter Feb 2012
2012 is definitely the time to invest in property instead of the share market. All signs point to a booming rental market this year, including impressive turnouts at open homes for rent and tight vacancy rates. According to news.com.au, Tim McKibbin, CEO of the Real Estate Institute of NSW, said the residential rental market is experiencing heavy demand which is far outweighing supply.
Strong rentals and a shortage of property means that landlords are able to pick and choose tenants who often offer more than the advertised market rate in order to secure a lease. "It’s a landlords' market," Mr McKibbin said. "At the end of the day, what the landlord is looking for is a person who goes into their property and won't wreck it. They're looking for capital growth and they're looking for someone to pay the rent on time." He added that an "addiction" to property taxes at all levels of government coupled with obstacles for planning approvals lead to a slowdown in much needed construction. "With supply not meeting demand I'm very certain that you're going to see rents remaining quite high."
Figures from Australian Property Monitors showed the median rent for houses in Sydney has now reached $500 a week and $460 a week for units. Inner Sydney vacancy rates fell below 1 per cent by mid last year, a rate the REINSW described as "alarming".
This rental shortage is sure to bolster sales demand for typical rental properties such as affordable one and two-bedroom apartments. Since January 1 first home buyers now have to fund their stamp duty, meaning that they are likely to stay in the rental market for longer. The result of this is that we’re likely to see more people trying to acquire rental properties to take advantage of this situation.
- Paul Davies Managing Director
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