Rents are growing at a faster rate than property prices, new research has found.

According to RP Data’s latest property pulse, in the five years to February 2011 capital city rents grew faster than property values.

“The debate over affordability in the past five years has intensified, however, what is often missed is the fact that over this time capital city rental rates increased at a greater average annual rate than capital city property values,” RP Data’s research analyst Cameron Kusher said.

Darwin and Melbourne saw the biggest increase in rents, with the average rental rate for houses growing by 10 and 7.5 per cent respectively.

Mr Kusher said the rising rate problem was unlikely to be rectified any time soon.

“With investors and first home buyers reluctant to spend at the moment, coupled with housing affordability stretched because of recent value growth and a weaker period of interest rates and construction for the remainder of 2011, we anticipate that this will put upwards pressure on rents,” he said.

“In addition, rental growth has been sluggish for quite some time – we expect there to be improvements increase the rents.”

The Housing Industry Association is calling on the federal government to boost new housing activity in a bid to alleviate the crippling housing shortage.

ABS figures released yesterday confirmed that residential building activity ended 2010 on a soft note, with residential building work falling 0.6 per cent in the December 2010 quarter.

HIA economist Harley Dale said the weak data looked set to continue well into 2011.

“In 2011 we look set to experience one of the weakest years for new home starts since the mid 1990s,” Mr Dale said.

“The Federal Government needs to act urgently to introduce short term stimulus measures to boost new housing activity and turnaround a housing slump that is shutting out first home buyers and aggravating financial stress felt by lower income rental households.

“New home building activity peaked back in mid-2010 and on-going weakening in new housing conditions is having a significant adverse impact on governments’ budgets.”

In the December 2010 quarter, seasonally adjusted new residential work done fell by 2.3 per cent in New South Wales, 4.8 per cent in Queensland, 5.8 per cent in Tasmania, 0.4 per cent in the Northern Territory, and 10.4 per cent in the ACT.

(Source: Staff, Wednesday, 20 April 2011)

The newly-elected NSW O’Farrell government has confirmed pre-election promises to abolish a housing levy and extend a stamp-duty exemption.In its 100 Day Action Plan released yesterday, the NSW Government confirmed it will offer a two-year stamp duty exemption to over 55s who move into a new home between 1 July 2011 and 30 June 2012. According to advice from Gadens Lawyers, the exemption will apply to new home purchases and off-the-plan purchases made in connection with a relocation of residence by people over 55.

The state government also pledged to axe the Torrens assurance levy, a levy currently imposed on property transfers above $500,000. The levy was calculated at 0.2% for transfers between $500,000 and $1m, and at 0.25% for properties above $1m. The abolition of the levy is set to come into effect from July 2011.

(Source: By Adam Smith | 6/04/2011)

Australian house prices are expected to climb moderately over the next 12 months, new data has revealed.

According to NAB’s Residential Property Survey, nationwide prices are tipped to increase by just 0.6 per cent over the next year led by WA, which is expected to enjoy a 1.1 per cent lift in property prices.

Looking further ahead, house prices are expected to rise by 2.6 per cent over the next two years.

But while the future looks bright for buyers, renters can expect to endure more heartache, with the average rent forecasted to rise by 3.5 per cent by March 2012 and 5.2 per cent by 2013.

The biggest gains in this period are forecast for Western Australia and New South Wales.

NAB’s chief economist Alan Olster said the bank had been forced to revise its rental expectations since its last survey.

“In December, nationwide rents were tipped to rise by 2.8 per cent over the next 12 months. However, the latest survey data is pointing to an increase of 3.5 per cent in the next year, with rental expectations stronger in all states except Victoria and Tasmania,” he said.

(Source: Staff reporter, Wednesday, 6 April, 2011)