While property prices remained fairly subdued in 2011, weekly rents continued on an upwards path in most capital cities. Last year, Sydney was among the standout performers with rents increasing by an impressive 4.2 per cent for houses and 4.5 per cent for apartments. Great news for investors but spare a thought for all the tenants out there competing for their next home!
The latest rental report from Australian Property Monitors (APM) says the median rent for a house in Sydney has reached a record of $500 per week, with apartments a little more affordable at $460 per week.
Rents for apartments are increasing at a more rapid rate because more people are competing for the cheaper option. There's also the ongoing desire, especially among Gen Y, to live in trendy inner city locations close to cafes, beaches, transport and the CBD and there are more apartments than houses available in those areas.
There's no sign of rent rises letting up either with Sydney's vacancy rate consistently around 1.5% for the entire second half of 2011, according to the NSW Real Estate Institute.
Overall, the APM report says Sydney, Canberra and Perth have the tightest rental markets and that's certainly been our experience at McGrath. Our landlords in Sydney and Canberra are receiving excellent returns and we're seeing strong ongoing demand from tenants.
So, what do these stats mean for landlords, prospective investors and tenants?
Landlords, especially in Sydney, should be feeling pretty confident. If your investment hasn't had a rental review in the past year, it might be time to talk to your property manager about thisProspective investors are looking at ideal conditions to purchase. APM says there was a small rise in the national median house price in December, which is the first rise they've recorded in about a year. Coupled with this is talk of more rate cuts, strong competition among lenders and a large range of properties now hitting the market for the autumn selling season. If you're ready to buy, now could be the ideal time Tenants are facing strong competition right now but there is a lot you can do to improve your chances of a successful application. Here are a few tips:
Have your application form filled in and ready to go on the day of the inspection. Most Agents will have the option of downloadable applications and online applications.Bring copies of references from previous property managers or landlords. If you have pets, bring references for them too (and photographs, if you can). You can get a pet reference from past property managers, landlords or your dog walker.Bring a print-out of your rental ledger – your current property manager can provide you with this.Dress well for the inspection and feel free to ask questions.Be willing to move in as soon as the property becomes vacant.Be ready to pay the holding fee if your application is approved.
How the market performs in the first quarter of 2012, both in terms of rental values and property values, will give us a good insight into what we can expect for the rest of the year. Stay tuned