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.”
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.”
(Source: Staff Reporter, Wednesday, 27 April 2011)
After showing signs of growth recovery in the March quarter, national rental growth for houses remained largely flat over the June quarter, the latest report has shown.
According to Australian Property Monitors (APM), national house rents rose by only 0.7 per cent over the June quarter of 2010.
On the flipside, unit rents showed solid rental returns, national growth coming in at 3.5 per cent for the June quarter.APM economist Matthew Bell said despite vacancy rates remaining low in most capitals, weak consumer spending and confidence had stalled rental growth.In addition, Mr Bell said worries over the world’s major economies spilled over into the local share market which fell nearly 10 per cent – also contributing to a stall in rental growth.
“The exodus from the rental market to the ownership market that occurred in 2009 is still having an effect on asking rents in most capitals,” Mr Bell said.
Despite this, Mr Bell said the alternative option for renters of moving into ownership has become less attractive. He said property prices have risen in most cities over the last year along with interest rates, deterring home buyers.
“As leases expire and are renewed however, it is expected that a robust employment market, rising incomes and low vacancy rates in most capitals will start seeing asking rents increasing again, as we’re already seeing in Sydney, the country’s largest rental market,” he said.
After showing signs of growth recovery in the March quarter, national rental growth for houses remained largely flat over the June quarter, the latest report has shown.
According to Australian Property Monitors (APM), national house rents rose by only 0.7 per cent over the June quarter of 2010.
On the flipside, unit rents showed solid rental returns, national growth coming in at 3.5 per cent for the June quarter.APM economist Matthew Bell said despite vacancy rates remaining low in most capitals, weak consumer spending and confidence had stalled rental growth.In addition, Mr Bell said worries over the world’s major economies spilled over into the local share market which fell nearly 10 per cent – also contributing to a stall in rental growth.
“The exodus from the rental market to the ownership market that occurred in 2009 is still having an effect on asking rents in most capitals,” Mr Bell said.
Despite this, Mr Bell said the alternative option for renters of moving into ownership has become less attractive. He said property prices have risen in most cities over the last year along with interest rates, deterring home buyers.
“As leases expire and are renewed however, it is expected that a robust employment market, rising incomes and low vacancy rates in most capitals will start seeing asking rents increasing again, as we’re already seeing in Sydney, the country’s largest rental market,” he said.
(By: Staff Reporter, Wednesday, 8 August 2010)