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Residential rental property Booms as vacancy rates continue to tighten
- By Kirsten Craze | The Daily Telegraph | January 30
HOUSE prices might be sluggish, but all signs are pointing to a booming rental market this year, with long queues at inspection times and tight vacancy rates.
But high rentals and shortage of properties means landlords are able to pick and choose tenants who tick every box, leaving many single parents and self-employed people struggling to find a home.
Tim McKibbin, CEO of the Real Estate Institute of NSW said the residential rental market was suffering under a heavy demand which is far outweighing supply.
Figures from Australian Property Monitors showed the median rent for houses in Sydney has now reached $500 a week and $460 a week for units.
“It is a landlords’ market,” Mr McKibbin said. “When you’ve got 30 people lining up for the one property, you’re essentially going to have 29 people missing out.
“At the end of the day, what the landlord is looking for is a person who goes into their property and won’t wreck it. They’re looking for capital growth and they’re looking for someone to pay the rent on time,” he said.
He said the residential rental market needs to be looked at like any other market which is driven by supply and demand.
“Our supply of properties coming on to the market just simply doesn’t meet the demand. It’s that simple,” Mr McKibbin said, adding that an “addiction” to property taxes at all levels of government coupled with obstacles for planning approvals lead to a slowdown in much needed construction.
“With supply not meeting demand I’m very certain that you’re going to see rents remaining quite high.”
Mr McKibbin said that investors, an increasing amount of whom are mum and dad investors planning for their retirement and not multimillionaire property barons, are just treating their investments as a business transaction.
“People who invest in residential property aren’t investing because there’s a housing shortage, they’re investors. The only reason people invest is because they’re looking to make a gain out of it,” he said.
Inner Sydney vacancy rates fell below 1 per cent by mid last year, a rate the REINSW described as “alarming”.
According to Mr McKibben the situation could worsen as many potential first-time buyers are now staying on the rental treadmill longer thanks to recent changes in stamp duty requirements: “With first-home buyers now having to fund their stamp duty, whereas up to the December 31 they didn’t have to, the consequence is you’re going to see more people trying to acquire rental properties.”
Apartment rents performing well
The rental market for apartments has outperformed that of houses during the year to September, according to Australian Property Monitors. The rent for units has been creeping higher and in most capital cities prices are almost as expensive as houses.
Nationally median rents for houses fell by 0.2 per cent while unit rents rose 1.1 per cent, according to APM’s Rental Price Series Quarterly Report.
Median rents for apartments are approaching parity with houses in most capital cities.
In Melbourne the median rent for units is $350 (houses $360), in Sydney $460 (houses $495), in Brisbane $360 (houses $370), in Perth $370 (houses $380) and in Canberra $430 (houses $465).
read more: http://www.propertyupdate.com.au/apartment-rents-outperform-houses.html
Perth rents heat up
From: www.apimagazine.com.au
Perth rents heat up
As Perth house sales rise by only one per cent for the September quarter, and villas and townhouses experience a seven per cent drop, more individuals are turning to renting which means rising rents for landlords, according to the Real Estate Institute of Western Australia (REIWA).
Despite an increasing supply of ‘for sale’ stock being passed in to the Perth rental market, the strengthening rental demand has more than absorbed the surge, as overall properties available for lease plunge by 20 per cent for the September quarter, said the REIWA.
The plunging rental vacancy rate from 3.4 per cent in the June quarter to 2.8 per cent in the September quarter is an indication that more individuals are choosing to rent than own, resulting in stronger rental returns for landlords at an increased rate of four per cent or $15 per week on the average rent, said REIWA president David Airey.
This average rent increase – the first mid-year rent rise since 2008 – nudges the annual increase to 6.8 per cent, he said.
However some areas in Perth have performed better than others.
The highest recorded average rent increase of eight per cent has been witnessed in the City of Melville due to strong multi-residential leases, while the City of Cockburn was up by five per cent to $400 and the City of Vincent/SE City of Stirling was up by five per cent to $405.
No increase was evident in the Cities of Swan, Rockingham-Kwinana, Belmont, Canning, or the southern areas of City of Joondalup due to what Airey said might be the “mix of property available for lease”.
“Both the overall median house and multi-residential rents increased by $10 per week for the quarter, taking the median house rent to $400 per week and the median unit rent to $380 per week,” he said.
CHOGM Perth 2011
WESTERN Australians can expect significant disruption in Perth during the Commonwealth Heads of Government Meeting in October, the event’s organisers say.
On the recently announced public holiday Friday October 28, which marks the official start of CHOGM with a red carpet opening ceremony to be held at the Perth Convention and Exhibition Centre, almost the entire length of St Georges Terrace and Adelaide Terrace will be closed from the Causeway to Kings Park to allow the precisely-timed arrivals of more than 50 heads of Commonwealth countries as well as Queen Elizabeth II and the Duke of Edinburgh.
There will also be traffic disruptions in the city leading up to CHOGM from Monday October 24, although the intention is keep annoyances to local residents and the business community to a minimum.
WA Police deputy commissioner Chris Dawson described the event as the largest security operation ever attempted in WA.
As such, the deputy commissioner said interstate police officers and members of the Australian Federal Police will join local cops in helping to protect and safely transport the delegates around Perth for official functions.
Specifically, he said very high levels of planning was already underway to successfully negotiate the 600 motorcade movements that will take place during, and in the week leading up to CHOGM, which will run for three days from 28 – 31 October.
Effectively, he said, there will be police barriers at either end of the Terraces for the three days of CHOGM.
While train services may be increased on the public holiday to encourage punters into the city for what’s expected to be a chance to see the Queen, The Esplanade bus station will be closed and there will be no CAT buses or regular buses moving along the Terraces during CHOGM.
“It’s about allowing that public connectivity and not being a sterile blockade,” deputy commissioner Dawson said.
And he said WAPOL would monitor any demonstrations that may take place, as long as protestors were lawful and non-violent, from its “nerve centre” of operations, a command centre in Maylands.
While plans for staging the massive international event seem to be progressing smoothly at the moment, CHOGM Taskforce head Terry Crane admits there may be a few bumps in the road before October.
“I think we are pretty well set,” Mr Crane said.
“We’ve been working on this now, well some of us, for 12 months.
“There are always things that come up at the last minute that challenge you. I was involved in Coolum CHOGM and things do arise.
“You always get a curve ball but I think we’re pretty well placed.”
City of Perth CEO Frank Edwards said beyond the disruptions to city traffic, which will require local residents to present identification to enter cross streets and access apartment buildings, parking at the PCEC will effectively be closed from midnight Thursday October 27 until the end of CHOGM.
Council House parking will be reduced by at least 25 per cent to allow room for official Commonwealth use.
But Mr Edwards said alternatives for parking vehicles in the city will be announced in tandem with information pertaining to the significant reduction in street parking available during October.
CHOGM state director Richard Muirhead indicated that more than 12,000 people are expected to seek accreditation to attend CHOGM, including an estimated 1000 members of international media.
Mr Muirhead said work on the leader’s retreat, a $9 million State Reception Centre atop Fraser’s Restaurant in Kings Park, was progressing well in tandem with work on the CHOGM-related business, youth and people’s forums and the Commonwealth Festival which was being overseen by the Perth International Arts Festival.
Article By Russell Quinn perthnow.com.au