This article is from the Australian Property Journal archive
RESIDENTIAL property investors have given renters a respite. According to Australian Property Monitors' rents increased marginally in the December 2008 quarter following double digit hikes earlier in the year.
However, the APM Rental Series December show Sydney renters still do it tough, as demand for well located properties continues to outstrip supply.
In the three months to December, house rents in Sydney rose 4.7% to $450 per week – up from $430 pw in September. Over the year, Sydney rents were 16.9% compared to $385 pw in December 2007.
The survey also found Darwin is now Australia’s most unaffordable capital city, with median rents jumping 25% for houses and 20% for units in one year. Over the quarter, it rose 4.2% to $500 pw.
Meanwhile Canberra reported the biggest increase in house rents, rising 5% to $420 pw.
Rents also rose in Perth, Adelaide and Newcastle, up 2.9%, 3.4% and 1.7% respectively to $360 pw, $300 pw and $300 pw respectively.
Rent growth was flat in Melbourne ($350 pw), Brisbane ($350 pw), the Gold Coast ($420 pw), Hobart ($290 pw) and the Sunshine Coast ($390 pw) and remained unchanged from the September quarter.
APM’s senior economist Liam O’Hara said the December quarter offered some respite to renters from the aggressive double-digit price increases they put up with in the early stages of 2008.
“Particularly, the growing population of renters in units will be pleased to hear that their landlord’s appetite for hiking up the rent seems to be diminishing. Changes in median asking rents are gradually slowing,” he added.
Meanwhile the survey found growing rental yields coupled with lower interest rates are giving existing property investors a glimmer of hope.
During the quarter, gross house rental yields rose 3.3% to 4.50% in Sydney, 3.5% to 4.24% in Melbourne, 0.9% to 4.53% in Brisbane, 2.3% to 4.41% in Adelaide, 2.5% to 4.85% in Canberra, 3.6% to 4.14% in Perth, 0.8% to 5.11% in Hobart, 1.3% to 4.82% in Newcastle, 1.3% to 4.43% on the Gold Coast and 1.4% to 4.14% on the Sunshine Coast.
Gross rental yields fell in Darwin, by 1.4% to 5.38%.
“For landlords, rental yields have risen very modestly, but are only slightly above short-term interest rates,”
But he added lower interest rates will not lure sufficient new property investors to relieve critical supply shortages and infrastructure constraints in the medium term
“This does not provide an adequate premium for new potential investors to enter the market, and therefore supply additional rental accommodation.
“There’s no immediate ease to the rental squeeze and the expected end to the First Home Owners’ Boost, in mid 2009, for new dwellings will not assist long-term price stability in the rental market.
“That said, moderations in rental increases will be more evident as the constraints of a slower economy, falling incomes and higher unemployment reduce the willingness and capacity of renters to pay significantly more in Australia’s major capital cities,” he concluded.
Propertyreview.com.au
