The Real Estate Institute of Australia (REIA) has recently published nationwide data indicating that rents have increased by 25 % over the last 3 years.
The cause of rising rentals has to do with the lack of new home construction and cautious investors continuing to put off building more investment properties.
According to property commentator Michael Matusik, rents will continue increasing over the next 3 years. Matusik’s research shows that 25% of the average renter’s income went into paying their rent in 2004. Today that figure has advanced to 26% of their income.
There is no doubt that some renters are doing it tough, but the report suggests that, generally speaking, renters can afford the increases.
The most recent figures of the REIA indicate a vacancy rate in all capital cities averaging 1.9% for the September quarter. Noel Dyett, president of the Institute comments that a vacancy rate below 3% is regarded as undersupply.
To gain perspective on these figures, one need only look at the REIA’s figures for the average vacancy rate around Australia for the past twenty years. That figure is 3.6%. The 1.9% current figure has been in effect since March 2005.
However, if rentals are set with unrealistic expectations, properties will sit longer on the market, costing the owners precious lost rental income. Generally speaking, it’s not worth the effort to try and recoup an extra $10 or $15 per week when you figure the costs of a week or two’s vacancy.
If you have a question about real estate, or would like assistance with property management, feel free to phone me, Noel Thompson Principal Professionals Logan Lifestyles at either Waterford 3299 7733, Browns Plains 3800 4000 or Springwood 3808 5544