Sign in to follow this  
Followers 0
zaph

rents fall in Canberra and rise in perth

9 posts in this topic

Canberra renters have experienced some of the biggest price drops in the country, but landlords can expect to make up their losses in the coming months.

Median asking rents for ACT houses fell by 2 per cent to $490 a week over the March quarter, according to figures issued by Australian Property Monitors yesterday.

The drop positions the capital as the third most expensive capital city in which to rent a house, an improvement from the December quarter when Canberra was on par with Sydney at $500.

Advertisement: Story continues belowReal Estate Institute ACT director Craig Bright said the drop may be partially attributed to a number of high-end complexes that were completed in the past six months, many containing apartments which had to slash their initial rents to become affordable.

He said the capital's rent had been relatively stable but acknowledged costs could soon rise.

''There is a consensus that because the sales market is reasonable flat, pressure will be put on the rental market,'' he said.

''If people aren't buying, they're most likely renting.''

While Canberra figures fell over the quarter, the past year recorded a 2.1 per cent increase in the median weekly asking rent for houses.

Renting an apartment in the capital also became more expensive throughout the past 12 months, with the median weekly asking rent increasing by 1.2 per cent to $435.

http://brisbanetimes.domain.com.au/real-estate-news/rents-fall-but-tipped-to-rise-again-20120412-1wwtf.html

Official data has shown for the first time the extent to which Perth renters are having to dig into their pockets to bribe landlords and secure a home well above the asking price.

Tenants and real estate agents have for months told stories of prospective renters immediately offering 10 per cent more than the advertised weekly rent price.

Now two property reports have confirmed the stories - and experts on the East Coast are stunned.

Advertisement: Story continues below

Perth renters are on average paying $50 per week more than the asking price for a unit or townhouse and $25 per week more for a house.

The dramatic discrepancy is revealed in reports by the Real Estate Institute of WA (which reports on actual rents paid) and Australian Property Monitors (which follows advertised prices).

The median weekly rent in Perth soared 10 per cent in the year to March, according to REIWA.

The median weekly rent is now $425 for a house (up $5 for the quarter) and $400 for a unit or townhouse (up $20 for the quarter).

Share this post


Link to post
Share on other sites

I am actually surprised the Perth rent for houses is only up by $5.00.

Getting a rental is becoming quite tough out in the far burbs. I don't know why, maybe because heaps of properties are up for sale?

I must say this though it is becoming a bit of an issue for me now as property managers definitely have the upper hand and given in particular burbs they all talk to each other you basically have to bend over even if you are in the right because having a win is only short lived when you then find you are locked out of the rental market.

All that said it still stacks up dramatically in favour of renting on purely financial terms so if I did buy it would only be to get rid of the angst around wondering whether you have to move every 12 months in a tight rental market. Australia really needs better rules around renting. Probably tougher on both sides; tougher on renters and landlords so both good tennants and good landlords get rewarded rather than the current problem landlords and problem tennants getting away with too much because the other often reasonable party in the equation just cops it on the chin because the regulation does not offer stiff enough penalties.

Share this post


Link to post
Share on other sites

I am actually surprised the Perth rent for houses is only up by $5.00.

Getting a rental is becoming quite tough out in the far burbs. I don't know why, maybe because heaps of properties are up for sale?

I must say this though it is becoming a bit of an issue for me now as property managers definitely have the upper hand and given in particular burbs they all talk to each other you basically have to bend over even if you are in the right because having a win is only short lived when you then find you are locked out of the rental market.

All that said it still stacks up dramatically in favour of renting on purely financial terms so if I did buy it would only be to get rid of the angst around wondering whether you have to move every 12 months in a tight rental market. Australia really needs better rules around renting. Probably tougher on both sides; tougher on renters and landlords so both good tennants and good landlords get rewarded rather than the current problem landlords and problem tennants getting away with too much because the other often reasonable party in the equation just cops it on the chin because the regulation does not offer stiff enough penalties.

I saw a flood of rental properties up for sale in Perth about 6-12 months ago, investors bailing out I guess, no capital gains to be had and global uncertainties hitting the MSM.

Perth rentals are still cheap, $420 a week would service a $270K mortgage (25yrs, 6.5%), can't buy anything for $270K and wouldn't want to considering the areas and state of properties. Seems to be a flood of people coming to Perth for the work as it is now the land of milk and honey and jobs a plenty with VIC, SA and QLD in/going into technical recessions. The demand for Perth rentals says people aren't planning to stay here or don't have the capacity or inclination to buy, smells of boom/bust. Perhaps the masses are finallly realising how overpriced and unsustainable it all is, hence the demand for rentals.

Share this post


Link to post
Share on other sites

I saw a flood of rental properties up for sale in Perth about 6-12 months ago, investors bailing out I guess, no capital gains to be had and global uncertainties hitting the MSM.

Perth rentals are still cheap, $420 a week would service a $270K mortgage (25yrs, 6.5%), can't buy anything for $270K and wouldn't want to considering the areas and state of properties. Seems to be a flood of people coming to Perth for the work as it is now the land of milk and honey and jobs a plenty with VIC, SA and QLD in/going into technical recessions. The demand for Perth rentals says people aren't planning to stay here or don't have the capacity or inclination to buy, smells of boom/bust. Perhaps the masses are finallly realising how overpriced and unsustainable it all is, hence the demand for rentals.

Yes that is nail on the head I think.

That is the only reason I am scared about buying in Perth. If I thought rents were sustainable at current prices and prices of homes were going to move with inflation I would buy in a heartbeat as I don't mind loosing 100k over a lifetime and living in my own home. But this situation is in the middle of an influx of people so what happens when this stops? That said if I had bought 3 years ago I would be 200k behind the 8 ball where I am, granted it is close to mandurah the gc of the west so this is not reflective of Perth generally.

Share this post


Link to post
Share on other sites

What could cause rents to fall ... how about an increase in the supply of rental properties as they could not be sold for the desired asking price?

and a classic from the good doctor:

But senior economist at APM Dr Andrew Wilson says flat or falling rental growth for both units and houses in most capital cities has not resulted in falling gross rental yields

So if you get less rent, your yield is unaffected?? Somebody explain that one to me!

Rents stable or falling in all capitals bar Darwin and Hobart in March quarter: APM

Only Darwin and Hobart went against the national trend of static or falling rents over the March quarter according to the latest APM rental report.

The report found rents remained stable or fell during the March quarter in most capital cities, giving temporary relief to renters.

But senior economist at APM Dr Andrew Wilson says flat or falling rental growth for both units and houses in most capital cities has not resulted in falling gross rental yields.

The median weekly asking rent for houses in Australia was $409 for the March quarter, while median asking rent for units declined 1.1% to $401 over the same period.

Darwin had the greatest quarterly and yearly rent increase for houses but was the only capital where yields went down for houses. House rents rose 3.6% over the quarter and 11.8% over the year to $570 a week. House yields went up 9.6% over the year to 4.94%. Unit rents are down 2.1% over the quarter but up 2.2% over the year, while unit yields went up 11.2% over the year to 5.58%.

Hobart house rents increased, but the Tasmanian capital had the greatest yearly fall for unit rents. It was the only capital where unit yields went down over the year. It had the greatest yearly fall in yields for houses. House rents rose 3.1% over the quarter to $330 a week, up 1.5% over the year. House yields are down 1.4% over the year to 5.23%. Unit rents are unchanged over the quarter and down 3.7% over the year. Unit yields are down 1.3% for the year to 5.13%.

apmapril13.gif

Sydney had the greatest quarterly fall for unit rents over the quarter. House rents remain unchanged over the quarter at $500 a week, up 2% over the year. House yields are up 5.8% for the year to 4.71%. Unit rents are down 2.2% over the quarter to $450 a week and unchanged over the year. Unit yields are up 3.7% over the year to 5.18%.

apmapril134.gif

Melbourne had the greatest yearly fall for house rents. It had the greatest yearly increase in yields for houses. House rents remain unchanged over the quarter at $360 a week, down 1.4% over the year. House yields are up 11% over the year to 4.12%. Unit rents are unchanged over the quarter and over the year at $350 a week. Unit yields are up 4.6% over the year to 4.63%.

Brisbane had the greatest yearly increase for units. House rents are unchanged over the quarter at $380 a week, up 2.7% over the year. House yields are up 7.7% over the year to 5.08%. Unit rents are unchanged over the quarter at $365 a week up 4.3% over the year. Unit yields are up 6.6% over the year to 5.29%.

apmapril132.gif

In Adelaide house rents are down 0.6% over the quarter and over the year at $338 a week. Yields for houses went up 6% over the year to 4.69%. Unit rents are unchanged over the quarter and over the year at $280 a week. Unit yields are up 4.2% over the year to 4.98%.

Perth had the greatest yearly increase in yields for units. House rents are unchanged over the quarter at $400 a week, up 3.9% over the year. House yields went up 10.8% over the year to 4.92%. Unit rents are unchanged over the quarter at $350 a week, up 2.9% over the year. Unit yields increased 16.6% over the quarter to 5.5%.

over the year to 5.29%.

apmapril133.gif

In Canberra hose rents are down 2% over the quarter at $490 a week, up 2.1% over the year. House yields increased 3.9% over the year to 4.97%. Unit rents are down 1.1% over the quarter to $435 a week up 1.2% over the year. Unit yields are up 3.7% over the year to 5.65%.

Wilson says increased buyer activity over the March quarter has taken some pressure off rental markets, but the reprieve won’t last long.

“Improved housing affordability with the bottoming of the price cycle, falling interest rates and an improved economic outlook has facilitated increased buyer activity in most capital cities particularly from first homeowners,” says Wilson.

“This has taken some demand pressure off rental markets with flat rental growth recorded over the March quarter as a consequence.

“However with ongoing shortages of accommodation, low levels of new supply and continued inactivity by investors, upward pressure on rentals can be expected to resume in most centres over 2012.”

He says this is particularly evident in Sydney where ABS figures show a 60% state-wide surge in first homebuyer loans over the last quarter of 2011 which has reduced demand for rental properties, particularly units.

“Units continue to provide higher gross rental returns compared to houses in all the mainland capitals,” says Wilson.

“Gross investment yield growth should track sideways from mid-2012 as prices and rental increases emerge concurrently.”

He says Melbourne continues to be most tenant-friendly capital.

Share this post


Link to post
Share on other sites

But senior economist at APM Dr Andrew Wilson says flat or falling rental growth for both units and houses in most capital cities has not resulted in falling gross rental yields

So if you get less rent, your yield is unaffected?? Somebody explain that one to me!

It's his backhanded way of letting property investors know not to worry about the situation. No need to worry about rents falling, cause if your property value is falling faster than your rental return your gross yield (on capital value) is actually increasing... YAY!

Share this post


Link to post
Share on other sites

I saw a flood of rental properties up for sale in Perth about 6-12 months ago, investors bailing out I guess, no capital gains to be had and global uncertainties hitting the MSM.

Perth rentals are still cheap, $420 a week would service a $270K mortgage (25yrs, 6.5%), can't buy anything for $270K and wouldn't want to considering the areas and state of properties. Seems to be a flood of people coming to Perth for the work as it is now the land of milk and honey and jobs a plenty with VIC, SA and QLD in/going into technical recessions. The demand for Perth rentals says people aren't planning to stay here or don't have the capacity or inclination to buy, smells of boom/bust. Perhaps the masses are finallly realising how overpriced and unsustainable it all is, hence the demand for rentals.

There goes the neighbourhood BWAHAHAHA...

http://www.miningaustralia.com.au/news/qantas-opens-sydney-newman-mining-route

Share this post


Link to post
Share on other sites

It's his backhanded way of letting property investors know not to worry about the situation. No need to worry about rents falling, cause if your property value is falling faster than your rental return your gross yield (on capital value) is actually increasing... YAY!

Old value of investment property $500K; Rent at $410 a week, yield 4.26%

New value of precious investment $450K; Rent at $390 a week, yield 4.50%

You've lost $50,000 in underlying asset, lost $1,040 in rent but your yield has improved by 5.06% (rate of change of yield is 2nd derivative type stuff, but if you are dumb c**t who laps up RE spruik numbers it sounds good).

Share this post


Link to post
Share on other sites

hahah seems ridiculous to me.

yield is unimportant when both value and rents are both falling - ouch

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now
Sign in to follow this  
Followers 0