The Australian Property Monitors released figures today indicating rents for houses have increased by as much as 15 percent in the last year. APM reported the biggest growth was in Brisbane while rents actually got cheaper in Darwin.
“Mr McNamara says it is definitely a landlord’s market. “We do know that the return on investment is as high as it’s been in five years for investors,” he said. “That will mean that the investment fundamentals are once more there for investors to start looking for property as a preferred asset class once again.”
Meanwhile figures from the ABS for the past year to March 2007 shows the following rent increases :
Perth +9.65%
Darwin +8.33%
Brisbane +7.3%
Hobart +7.01%
Canberra +5.52%
Adelaide +4.46
Sydney +4.02%
Melbourne +3.84%
Australia as a whole increased 5.17%.
As rents make up a significant weighting in the CPI, any large increases could place pressure on inflation and ultimately lead to Interest rate rises. “At one end, high interest rates are deterring would be investors from entering the property market,” Australian Property Monitors’ Michael McNamara.
As rents rise greater than wage growth, households will have less disposable income to spend in the economy on goods and services or to save for a housing deposit.
» Capital city rental prices up 15pc – The ABC, 1st June 2007.
» Units renting at same price as houses – The Australian, June 1, 2007.