Tenants can breathe a sigh of relief. Rents are flat or falling around the country in all but one capital city, according to the Domain Group's quarterly report released on Thursday morning.
That's not so good for all the investors beating down the doors at auctions.
But the rents may not have been key. Most investors have been motivated by extraordinary capital growth over the past year. "But coupled with the prospects for diminishing levels of prices growth going into 2015, this signals the peak of the investment market," the Domain Group's senior economist Andrew Wilson says.
Gross rental yields are pushing below 4 per cent in Sydney and Melbourne and Dr Wilson is predicting regulators won't need to act to kerb the high levels of investment activity.
"The market is adjusting through its own market forces, without having to have any policy intrusion," Dr Wilson says.
RP Data research director Tim Lawless released the company's own rental data on Thursday that showed apartment rents were unchanged over the quarter for Sydney and Melbourne. "The softer rental conditions are likely the result of the surge in investor-related activity which is seeing more rental supply hit the market," Mr Lawless said.
Like always our resident experts here are able to tell us these things long before the so called experts.
Our resident experts are also able to give a more accurate and honest analysis , as they have no vested interest in talking the market up or attempting to make things appear better than they.
Our so called experts here claim both Melbourne and Sydney apatments rents have been flat for months.
When in fact they are falling In both capitals, not only for units as they would makeout here but also for houses. Isn't that right shadow
Why are these dopes always late to the party, and then spin bullshit to make it appear better than it is ?
Mr Wilson is scared of Macro prudential policies that will obliterate the already falling market - so is now trying his own jaw boning act.
"Please leave us alone, it's all about to come tumbling down and anything else that happens will just drop a bigger brick into the pond!"
Rents falling, FHB gone, credit limits being reached, the biggest amount of personal debt per person held since records began, how will this end respectably?!
yes, i have noticed that in sydney. i've seen the rental history for some units in suburbs close to the CBD (<8km). The recent for rent history shows the unit are put for rent at a certain price, and it shows the unit is listed for rent again one month later at a lower price, like $20 or $30 less per week.
to me it shows that the theory of : there is a housing under supply and the market is ruled by offer and demand is wrong to a certain extent.
After a bubble has burst, no one denies that it existed. But before it does, the popular refrain is that though bubbles existed elsewhere in the world, “there’s no bubble here”. So housing bubbles are admitted to have existed in Japan, the USA, Spain and Ireland – because they’ve already burst.
Asking rents have stalled in the capital cities after a spike in investment property purchases pushed up supply in the housing rental market.
In cities where home and apartment prices have risen, the slowdown in rental growth has led to yield depression in the past year.
Rental growth for houses was flat in most cities in the September quarter and fell in some areas for units, research from Domain Group showed. Year-on-year rents tended to be flat.
Property lending for investors has been at a record high. Broker firm AFG said investors made up almost half the new loans processed in NSW last month and more than 30 per cent in the other states. Foreign investment has also boosted the number of homes available to rent.
The rental market has become more affordable for tenants in Canberra and Perth as landlord returns fall. Asking rents were down 6 per cent in Perth to $395 for units and $450 for houses. In Canberra, rents have fallen to $380 a week for units and $450 for homes.
Yields for homes have dropped more than 6 per cent in both cities compared with the 2013 September quarter. Unit yields have also dropped more than 6 per cent year-on-year to 4.52 per cent.
In Melbourne, where apartment supply has continued to grow, yields remained steady at 4.55 per cent for units and fell 3.6 per cent for houses to 4.12 per cent. Melbourne’s median asking rent for a home is $380 a week and $370 a week for units.
Despite a slowdown in Darwin property, the rental market is still tight and the median asking rent for a home is $660 a week – the highest in the country, followed by Sydney at $510. Sydney has been the country’s strongest-performing residential property market for the past year.
All the property investors here had better start accepting the possibility of failure in the regards to their assets. 6 years of turmoil and falling prices, stagnant rents and now falling rents. If you have a share portfolio go south you can bail out, take a loss and move on. But if you have a million dollars worth of debt, tied to regular rental returns, you could lose the lot, and your ppor to boot!
The main cause of all this is obvious to me as it no doubt is to many others. Too many investors all rushing in greedily to get their share of the dream has screwed the market. there will come a point in time when you won't be able to exit, after that point you will be trapped by falling prices and stagnating sales. We saw that in the US and here in Brisbane it has been evident for years. People trapped in investment properties because they can't get back what they paid for them. A Dream turned into a Nightmare!
All the property investors here had better start accepting the possibility of failure in the regards to their assets. 6 years of turmoil and falling prices, stagnant rents and now falling rents. If you have a share portfolio go south you can bail out, take a loss and move on. But if you have a million dollars worth of debt, tied to regular rental returns, you could lose the lot, and your ppor to boot!
The main cause of all this is obvious to me as it no doubt is to many others. Too many investors all rushing in greedily to get their share of the dream has screwed the market. there will come a point in time when you won't be able to exit, after that point you will be trapped by falling prices and stagnating sales. We saw that in the US and here in Brisbane it has been evident for years. People trapped in investment properties because they can't get back what they paid for them. A Dream turned into a Nightmare!
yes that's why we say that the property market is illiquid.
property prices may not fall as much as patient buyers would expect, because i think some who will lose won't want to sell at a loss, and will hang tight to death to their over valued property no matter what.
property prices may not fall as much as patient buyers would expect, because i think some who will lose won't want to sell at a loss, and will hang tight to death to their over valued property no matter what.
Agree, the troubled investors won't sell them for a loss. As long as they don't sell, they can still borrow against the properties to keep floating, but if they do, pop. I've been through 2 bankrupt auctions of investment apartments in Canberra, just stone through away from parliament house, used to be thought as a safe one. The owner clung to it till he went broke and sold at 120k lower than 2012 value.
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