Strong regional growth has underpinned a 6.6 per cent increase in rents nationally over the past 12 months, the highest annual growth in more than 10 years.
Regional areas have attracted stronger rental prices, banking an 11.3 per cent annual growth, the highest on record.
Corelogic’s Rental Review for the June quarter recorded a 2.1 per cent rise, down from the 3.2 per cent increase in the previous quarter, while yields decreased from 3.55 per cent to 3.41 per cent.
Regional rents grew 2.7 per cent in the June quarter, compared to 1.9 per cent in Australian capital cities.
Corelogic head of research Eliza Owen said rental price growth was in line with the current housing price upswing.
“Increased government stimulus through Covid-19, accumulated household savings through lockdown periods, the swift economic recovery seen as restrictions eased, and a lack of rental supply in some markets have exacerbated rental price increases, particularly in major centres of regional Australia,” Owen said.
“It is interesting to note that, as with house prices, rent prices are seeing a deceleration in growth at the national level and across each of the capital cities.
“This may reflect affordability constraints, but there could also be higher levels of rental supply as investor activity in the market increases.”
Australian Bureau of Statistics data supports this theory with a 13.3 per cent increase in new finance for investment property acquisitions.
Change in rents (all dwellings)
|Region||Median price||Annual change|
|Combined capital cities||$492||5%|
Darwin recorded a 21.8 per cent increase in rental prices, while Melbourne rental prices went backwards, with a 1.4 per cent decline.
Canberra remains the most expensive city to rent with a median rent of $620, while Adelaide remains the most affordable at $430.
Melbourne and Sydney’s unit rental prices continue to feel the long-ranging effects of Covid-19 and progressive lockdowns.
“In Sydney and Melbourne, unit rents continue to show year on year decline, at -1.1 per cent and -6.4 per cent respectively.
“As noted in previous quarters, these cities, which have historically had the highest intake of international migrants, have seen rental demand most impacted by international border closures amid the pandemic.”
Owen said the outlook for Australia’s rental market would follow the fortunes of the purchasing market.
“Very high rental growth is unsustainable while income growth remains subdued,” she said.
“The result will likely be more subdued growth rates in the coming quarters, especially as investor participation trends higher, delivering more rental supply.”
Article Source: www.theurbandeveloper.com
Investors and owner-occupiers leap onto the booming Gold Coast market
While owner-occupiers are seeking downsizing alternatives in coastal areas, investors are returning to the Gold Coast in the wake of historically low rental vacancy rates.
Ashwin Property director Tony Ashwin revealed increased yields, rising property prices and bullish forecasts have encouraged a return of investors to the Gold Coast market.
Mr Ashwin suggested a notable cohort of investors have started to purchase town houses in projects on the northern Gold Coast, encouraged by price growth, increased yields and improving infrastructure. He is currently marketing a $650 million waterfront development project in Helensvale.
“We are certainly seeing an uptick in investors inquiring, although the market is still predominantly owner-occupier,” Mr Ashwin said.
“There is a lot less stock out in the market currently and investors are certainly being encouraged into master planned communities which have great internal and surrounding infrastructure.
“The supply of four-bedroom homes has become particularly sparse on the Gold Coast, positioning this product as one of the most sought-after commodities on the property market.”
Mr Ashwin said the various local government infrastructure investments currently underway had encouraged investors back into the northern Gold Coast. This includes the Coomera Connector, which is set to reduce travel times around the Gold Coast region.
“People working in Surfers Paradise or Broadbeach may not have considered living or renting in northern Gold Coast locations like Hope Island and Helensvale because of the travel times, but now we’re talking 15-20 minutes once the Coomera Connector is complete,” he said.
The investor boom in rental markets comes as many owner-occupiers around the country are looking to downsize in coastal areas, such as the Gold Coast.
Downsizing.com.au CEO Amanda Graham suggested more over-50s are seeking a new sea change lifestyle with easy access to the big smoke.
An analysis of consumer search activity during the financial year 2020-21 has revealed a clear shift towards waterside regional or outer urban areas which frame large cities.
As well as the Gold Coast, other areas that have seen more consumers looking for downsized or retirement living include Mandurah in Western Australia, Newcastle and Wollongong in New South Wales, Redcliffe and Caloundra in Queensland, and the Mornington Peninsula and Greater Geelong in Victoria.
Ms Graham said the ongoing pandemic and related residential housing boom has sparked more over-50s to consider downsizing to a lifestyle-rich area.
“This generation has already accumulated considerable equity in their home after decades of paying off a mortgage,” Ms Graham said.
“Their home has been their biggest investment over their lifetime and is now the key to their financial freedom.
“For many of these downsizers, moving to a regional area on the outskirts of a major city is very appealing. It gives them the best of both worlds – a new coastal lifestyle away from the hustle and bustle along with the ability to easily travel back into the city to see family and friends, or have them visit.
“In saying this, we are still also seeing very strong growth in search activity for capital city areas, which remain popular with downsizers seeking a vibrant urban lifestyle, along with a newer, more modern home with less maintenance.”
Article Source: eliteagent.com
Why is there a housing shortage and why will government controls make it worse?
Rental control is a quick fix medicine to treat the symptoms, It will make the problem worse by exacerbating the fundamental problem, which is that Australians have been massively discouraged from becoming investors
A key reason why fundamental problems in the housing market are never solved is because people seek to treat the symptoms rather than the cause.
This is true in business and in life, as much as it is in the housing market. It makes little sense to take medication for high blood pressure if the underlying cause is that you’re overweight because you have a bad diet and you don’t exercise.
People who hover around the sidelines of the real estate industry, sniping at things they don’t like, are highly prone to demanding actions on the symptoms of a perceived problem when they should be addressing the underlying causes of the symptoms.
Treating symptoms, while ignoring causes, has a tendency to make problems worse. Right now, we have spectators to the housing market demanding controls on landlords because rents are rising.
Other spectators want draconian measures from regulatory authorities because prices are rising, bringing howls of outrage about housing affordability.
In both cases, their targets are investors, always a popular choice as scapegoats when there’s growth in housing markets and it’s characterised in media as a crisis.
The natural impulse of the sideline whingers is to demand a crackdown aimed at investors, because they’re always seen as the villains.
The reality for the issue of rapidly rising rents is that we need to be encouraging investors, not attacking them.
The symptoms of the problem are rising rents, but the cause is a chronic shortage of rental properties.
In my four decades of researching and writing about housing markets, I’ve never seen vacancies so low in so many places.
Anyone genuine in their concerns (rather than having a whinge or grandstanding for political reasons) should be asking why we have such a shortage and how we can fix that fundamental problem.
Rental control is a quick fix medicine to treat the symptoms, while ignoring the underlying market health issues. It will make the problem worse by exacerbating the fundamental problem, which is that Australians have been massively discouraged from becoming investors.
Rental vacancies are a function of the activity of property investors. When people buy dwellings and make them available for rental in large numbers, there are ample properties for everyone who wants or needs to be a tenant, and rents are likely to be stable.
But investors have been largely absent from the market in recent years. There has been a growing raft of disincentives to property investment over the past five or six years – including a series of negative measures by APRA, negative changes to depreciation rules and menacing political rhetoric at the last two federal elections, notably from the ALP which has been intent on scrapping negative gearing and increasing capital gains tax.
We’ve also had state governments discouraging investors by hitting them with new taxes, fees and charges. The impact of all those different milestone events since 2015 has been a profound discouragement to investment. Some sections of media have characterised property investment as something akin to a criminal activity, abetted by politicians who have claimed the average investor is a rich greedy bastard who owns 15 or 20 properties and is ripping off the system – a blatant lie (the official data shows 75% of investors have average incomes and own only one or two properties) but lapped up by a careless media.
The short-term consequences include a rental shortage crisis and the long-term outcomes include fewer Australians who will be self-funded in retirement and will need to be supported in growing numbers by taxpayers. If governments respond to the twits on the sidelines and enforce controls on rental levels, rather than allow market forces to set them, that will be yet another disincentive to investors – and the problem will get worse.
Limiting how much a tenant has to pay in rent is worthless if the prospective tenant can’t find a vacant property at any price. That’s the reality at the moment. There are so few vacant properties that there are dozens of applicants for every listing and people who desperately need a home keep missing out. Rents are rising because people are offering more than the asking rent in an effort to out-bid their competitors, not because landlords are asking extortionate rents.
And, as an aside, increasingly businesses can’t fill job vacancies because willing applicants can’t find anywhere to live. The only answer to this problem is to increase the supply of rental properties. And that means introducing measures that encourage property investors.
That will elicit further howls of indignation from the chattering economists and other sideline snipers, but it’s the only way to fix this problem.
Article Source: www.urban.com.au
Proposed Queensland rental reforms fall short: advocates
Rental advocates have slammed long-awaited Queensland reforms for dropping a key protection against unfair evictions and a strong assumption in favour of tenants keeping pets, after a significant campaign from property owners and the real estate sector.
The proposed laws, which Housing Minister Leeanne Enoch said aimed to end groundless evictions and establish minimum standards to improve conditions for the 36 per cent of the state’s households that rent, were introduced to Parliament on Friday after a years-long consultation process.
Under the changes, which push stage one of the government’s proposed reforms forward, a landlord will no longer be able to issue a notice to leave without grounds. Tenants who can no longer safely continue with a lease because they are experiencing domestic and family violence will be able to leave with one week’s notice.
Landlords must have reasonable grounds to refuse a tenant’s application to keep a pet, such as the property being unsuitable or to comply with by-laws, but could also place conditions on pet ownership, including that it be kept outside and the property properly cleaned at the end of the lease. The proposed laws also state that fair wear and tear does not include pet damage.
But tenant advocacy group Better Renting said the government needed to explain why it had moved away from a recommendation of its own review to bar landlords ending a lease at the end of a fixed-term contract unless they were planning to sell, undertake major renovations, or move in themselves.
“Queensland Labor must explain why they have departed from this recommendation and how people who rent their homes can possibly feel secure when, 10 months into a tenancy, they can be told to get out,” executive director Joel Dignam said.
With more people renting, and doing so for longer terms, tenants in such situations would still be in a weak position to oppose any refusal of a pet application, Mr Dignam said.
“The proposed changes fall short. People who rent will still be afraid of an unjustified notice to leave that will mean giving up their home and struggling to find a new place to live in a competitive rental market.”
Tenants Queensland chief executive Penny Carr welcomed the introduction of minimum standards and moves to make rentals more pet-friendly, but said the changes would undermine the current tenancy laws.
“We advocated new grounds to end tenancies, but only with the view to removing the ability to end tenancies without grounds,” Ms Carr said. “The government have done the former but not the latter.”
The Queenslanders with Disability Network raised concerns that a removed proposal allowing renters to make minor modifications would affect the community, while the Queensland Council of Social Service criticised the bill for not including air and ventilation requirements in the minimum standards.
Greens South Brisbane MP Amy MacMahon, who introduced her own private member’s bill this month seeking to also cap rent increases to once every two years by no more than CPI and ban rental bidding, said the government had sided with property owners and the real estate lobby.
Ms Enoch said the Greens’ bill would have made it less likely for an owner to rent our their property, and what was needed was a “strong, balanced” approach to encourage market growth and stability while also protecting the rights of both tenants and owners.
Rental vacancy rates remain low across the state, with the Real Estate Institute of Queensland recently reporting the tightest vacancies in Anstead (0.5 per cent), Birkdale (0.3 per cent) and Capalaba (0.2 per cent).
Institute chief executive Antonia Mercorella praised what she described as a fair outcome for tenancy laws in need of modernisation.
The government first flagged the reforms in 2018 with a consultation process that drew more than 135,000 responses. A second stage was expected to look at inspections, rental bonds and longer-term leases.
Article Source: www.brisbanetimes.com.au
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