Australian Rents Set to Drop
The combination of low interest rents and generous government grants has seen the first-home owner market start to pick up in the depths of the doom and gloom of the global financial crises.
But as always in property there is always another side to the story - and it may be that landlords aren't going to like this one. After years of ever increasing rents, queues of qualified tenants and media stories of well-deserving families sleeping in cars because they couldn't find a house, the tide may have started to turn in favour of the tenants.
According to The Australian:
Valuation firm Herron Todd White says in its March market review that while the numbers don't yet show this, the market's demeanor is an indicator.
HTW says in Sydney there have already been signs of falling rents, particularly in the prestige markets of the lower north shore and inner eastern suburbs.
The lower and middle brackets remain steady, but the days of 50 or more potential tenants showing up for an inspection appear to be over. At the lower end there are still excellent rental returns, although the number of people moving to home ownership may see rental increases slow.
What goes up... Ferris Wheel, Melbourne
As the costs of renting keep on going up and the cost of owning keeps on decreasing - its safe to say that landlords won't be able to continue to count on a nice little 10% rent increase each year. In fact for owner's of upmarket properties there is the double-wammy of an increase in rental stock as houses that have not sold being rented out instead. For the desperate who can't sell a property - some rent is better than none- giving the smart renter a welcome chance negotiate themselves a good deal.
Landlords who want to keep their property fully tenanted should be prepared to go back to doing it the old-fashioned way: actually maintaining the property in a superior condition so a good tenant might actually want it!
Well at least handymen and tradespeople are easier to come by for quick tidy-up jobs between tenants than they have been for years!
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