House rents have continued to rise in 2017 with rental markets in most capital cities tightening and providing no relief for tenants.
Most capital cities recorded increases in house rents over the quarter with Hobart reporting the highest growth rate of 5.7 per cent to a new record high of $370 per week. Hobart house rents have now remarkably matched those of Perth.
Melbourne rents were also up strongly over the quarter rising by 2.4 per cent followed by Sydney up 1.9 per cent and Brisbane where house rents increased by 1.3 per cent over the March quarter. Houses rents were steady in the other capitals.
Canberra, Hobart, Melbourne and Sydney houses rents have each increased sharply over the year ending March rising by 7.5 per cent, 5.7 per cent, 5.0 per cent and 4.8 per cent respectively.
Tenants can expect little relief from higher rents with declining rental affordability now emerging as a significant issue in most capitals. High migration and low numbers of first home buyers are continuing to fuel already strong demand. Recent record level housing construction has failed to ease rental markets, particularly in Sydney, Melbourne and Canberra.
With policymakers continuing to signal prospective initiatives designed to curb investor activity through tax or interest rates measures, the outlook for tenants certainly remains bleak if these policies result in fewer available rental properties.
MMM
13 Jul 2014, 06:59 PM
Rental prices have peaked in all capitals and will now decline for years
Ted, has your brother jacked up the shed rent yet this year?
They need to pay more of their income to their Lord every year, while house prices also move further and further out of reach.
Sydney is already up 80% in the past five years. So a home worth $1 million in 2011/2012 is worth $1.8 million today. That's $800K tax-free profit for basically doing nothing.
Any prospective buyers who listened to the bears five years ago and postponed buying must be kicking themselves today.
And now we have the launch of new rent bidding apps that encourage tenants to commit to even higher rental payments...
That only tells us housing values are going up even faster than the rents!
Sure, that is great for anyone who bought quite a while ago and can manage to cover the gap between rent and holding costs, however anyone who is buying now has to take a yield that is historically lower than it has been for at least a decade.
If they don't get the rise in house prices, their yield is not going to improve without them pouring money into the loan to get it down.
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