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Sydney has recorded its steepest annual jump in house rents in five years; "Does the news get any worse for first-home buyers?" said Domain Group senior economist Andrew Wilson
Topic Started: 9 Jul 2015, 10:29 AM (4,136 Views)
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Biggest jump in Sydney rents in five years: Domain Group

July 9, 2015 - 9:10AM, Kirsten Robb

Sydney has recorded its steepest annual jump in house rents in five years, according to research released on Thursday, and the blame is falling on first-home buyers.

The Sydney median house rent jumped 3.9 per cent over the past year to an all-time high of $530 a week, according to the Domain Group Rental Market Report.

The jump comes on the back of a strong June quarter with rents up 1.9 per cent.

The steepest jump in rents has been felt in Sydney's eastern suburbs, growing by 8.3 per cent to $975 over the past year and Ray White leasing agent Jimmy Fish isn't surprised.

"Does the news get any worse for first-home buyers?" said Domain Group senior economist Andrew Wilson.

"Not only are they having to find on average an extra $400 a week for their deposit based on current prices growth, they're now having to find extra rent while waiting in the queue."

In April, first-home buyers made up just 6.5 per cent of all home loans in NSW, according to data from the Australian Bureau of Statistics, modelled by Dr Wilson.

He said high rates of immigration and population growth were also putting upward pressure on rents.

"We would have thought that given that we have record numbers of investors, supply might have caught up to demand, but the new supply just can't match the demand," said Dr Wilson.

Bill Randolph, director of the city futures research centre at the University of NSW, said the jump in rents was "disconcerting", particularly given the amount of new home building that was taking place across NSW.

"I think the logic of the market suggests that as supply increases, rent increases should fall back – but that's not to say rents will fall," said Professor Randolph.

Apart from the strong growth in the eastern suburbs, house rents on the northern beaches are up 5.6 per cent over the year to $950 a week while the west and south-west regions have both grown by 4.7 per cent to $450 a week

"I think these numbers will just increase the number of investors interest in Sydney market – there's no relief in sight," said Dr Wilson.

"If you're a property owner, it's great news, but if you're a tenant, this is a bad news story."

Read more: http://news.domain.com.au/domain/real-estate-news/biggest-jump-in-sydney-rents-in-five-years-domain-group-20150708-gi7q92.html
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Bardon
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I was quite surprised how high this jump is and the growth that they are reporting in Melbourne. They say that prices and rent grow in different phases so maybe if rents start shooting up then growth will slow down.
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Elastic
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"We would have thought that given that we have record numbers of investors, supply might have caught up to demand, but the new supply just can't match the demand," said Dr Wilson.


Apparently he has a PhD.
Only a rat can win a rat race.

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Tenants rejoice: Rents growing at slowest pace since 1995 - ABC

No relief in sight: Rental market snapshot a 'horror story' for tenants - ABC
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miw
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Bardon
9 Jul 2015, 11:33 AM
I was quite surprised how high this jump is and the growth that they are reporting in Melbourne. They say that prices and rent grow in different phases so maybe if rents start shooting up then growth will slow down.
looking at the articles I'd say rents simply are not shooting up. The Domain article says houses went up 3.9% - note that it is houses and not dwellings, and 3.9% YoY to me is not bad for a LL in this low inflation environment, but still less than the average over the last 20 years.

It's just spin.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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The Whole Truth
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I think it's high time the government intervened?

New Rent Laws Aim to Keep Paris From Becoming Only for the Rich
France looks set to implement a series of groundbreaking laws designed to induce landlords to rent to a wider variety of income levels.


France’s new government of taking a hands-off approach when it comes to rent. The country’s socialist-led coalition is introducing a slew of new, groundbreaking laws to control rents and cap real estate agent fees. Counterbalancing these tenant-friendly measures, there will also be decrees giving property owners a state insurance system against unpaid rent, and limiting taxes for landlords who offer rental apartments in high-demand areas. Dubbed collectively the Loi Duflot after housing minister and Green Party member Cécile Duflot, the laws will hold throughout France but will be especially tight in designated "strained" zones, which contain 4.6 million homes in total. These include Paris, of course, but also Marseille, Lyon, Montpellier
http://www.citylab.com/cityfixer/2013/07/new-rent-laws-aim-keep-paris-becoming-only-rich/6187/

It's only a matter of time. Take the pressure of the poorer elements and save on social security outlays.
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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Elastic
9 Jul 2015, 01:40 PM


Apparently he has a PhD.
Dr. Wilson has liar written all over his face, always has.

Yet vacancy rates have been continually rising in most capitals for five years now. And with the investor led debt ponzi and subsequent building boom, they are about to go up a hell of a lot more again. Looking at building approval stats, we will have record amounts of property coming onto the market in the second or third quarter of next year. All up until then ,we have a shitload coming on. The record amount coming around this time next year, will be followed by a further record breaking amount a few months later, and then these high amounts of property coming on will continue for at least another six months after this according to building approval numbers.

Landlords in most capitals will be forced to start playing the rental discount game like the landlords in Perth and WA.

The vacancy rates of capital cities below.

http://www.sqmresearch.com.au/graph_vacancy.php?region=nsw%3A%3ASydney&type=c&t=1

We need to double the size and scale for Melbourne as 4% did not cut it.

http://www.sqmresearch.com.au/graph_vacancy.php?region=vic%3A%3AMelbourne&type=c&t=1

http://www.sqmresearch.com.au/graph_vacancy.php?region=qld%3A%3ABrisbane&type=c&t=1

http://www.sqmresearch.com.au/graph_vacancy.php?region=act%3A%3ACanberra&type=c&t=1

Looks like we will be needing a new scale for Perth when June numbers are updated Louis.

http://www.sqmresearch.com.au/graph_vacancy.php?region=wa%3A%3APerth&type=c&t=1

http://www.sqmresearch.com.au/graph_vacancy.php?region=sa%3A%3AAdelaide&type=c&t=1

http://www.sqmresearch.com.au/graph_vacancy.php?region=nt%3A%3ADarwin&type=c&t=1

And Hobart, which actually looks good compared to everyone else. But they have not had the building ponzi like evryone else is. Their sleepyness on that may be somewhat of a saviour for prices and rents in the long run.

http://www.sqmresearch.com.au/graph_vacancy.php?region=tas%3A%3AHobart&type=c&t=1

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Rents surge in Sydney's prestige suburbs
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11 Jul 2015, 12:24 PM
Some crap.....
Ted, you idiot! The article was about SYDNEY! Your own chart shows the Sydney over-all vacancy rate at 1.8% - a level it is has hovered around for the duration of your chart (since 2010). :re:
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Loki
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Alex Barton
9 Jul 2015, 10:29 AM
The Sydney median house rent jumped 3.9 per cent over the past year to an all-time high of $530 a week, according to the Domain Group Rental Market Report.
Haven't noticed a change around these parts. The landlord seemed pretty desperate to lock in the current rent for another year. Plenty of places with asking rents that nobody is paying, presumably for tax reasons. When million dollar houses are rising at 12% per year, a tenant is just a drag on liquidity.

A median is not a useful measure as it doesn't tell you anything about the distribution other than the middle value of it. Finger in the air, I would probably guess that the average hasn't moved at all. The bottom is being squeezed out by 'buy-and-hold' investors, and the top is flat or declining.


“Talk sense to a fool and he calls you foolish.” - Euripides
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