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Rebound tipped for stagnant rents
Wednesday, January 13, 2010
RENTS across Australia stagnated and in some cases even fell in the December quarter, but are expected to rise later this year.
A report to be released by Australian Property Monitors today says last year was the weakest for national rental growth since 2002.
The two per cent increase nationally was well down on the average rate of 12 per cent for 2007 and 2008, The Australian reports.
APM economist Matthew Bell said rises in median rents in Perth, Adelaide and Canberra for the December quarter were not enough to offset flat rental markets in Sydney, Melbourne and Brisbane. But he said December was likely to be the last quarter of flat rental growth.
Factors that would help the rental markets included the end of the boosted first-home buyers grant, brighter employment prospects, strong house price growth and low vacancy rates.
High population growth, climbing interest rates and taxes, and low supply would also support rental increases.
Mr Bell predicted Sydney rents would increase by at least double the 2009 rate of 2.2 per cent and Melbourne's rents should rise by five to seven per cent after a flat year.
He also predicted Perth median house rents could climb 11 per cent this year, in line with the average growth rate of 12.4 per cent experienced since 2003, while Brisbane rents should lift by about eight per cent.
While APM flags a strong lift in rents is likely this year, property managers and landlords reported that the market had remained soft so far this month, which is typically the busiest month for the rental market.
Chris Rolls, managing director of the Gold Coast and Brisbane residential property manager Rental Express, said: "We have found this is the slowest start to the year for the last five years."
Mr Rolls, who owns a four-bedroom rental property in Brisbane suburb Kelvin Grove, said the contract for the property came up for renewal in 10 days and he had opted to keep the rent at $520 a week in the hope that the current tenants would not leave.
"The risk is that if you increase the rent, and they don't pay it and instead move out, I won't get the same rent. It was top rent 12 months ago," Mr Rolls said.
- The Australian
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