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How rent increases result in more first-home buyers
How rent increases result in more first-home buyers

Rent increases can lead to an increase in first-home buyers. How will this affect your property investment? Will more property investors help to drive down the pressure on renters?

Kate addresses these questions and more in this latest video.

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Hello everyone out there, how are you all doing? I am Kate Hill, as always bringing you the best and unbiased and honest content on property along with some fantastic hints and tips. Today stay tuned for all your latest property news.

[Music] The pace of growth of unit rents is starting to surpass that of houses in many of our capital cities. The latest Domain rent report shows that the combined of capital cities median unit and house rent prices both came in at $600 a week up 20% for units and 9% for houses in the past 12 months. There were five cities that had annual rent increases which were higher for units than houses.

Sydney with an asking median unit rent of $680 a week which is up 17%, while its median house price rose 12% to $730 a week. Melbourne’s unit rents rose over 15% to $520 a week while the house rents rose over 14% to $650. Brisbane unit rents rose nearly 17% to $560 a week and house rents rose 9% to $600. Adelaide unit rents rose by 12.5% to $450 a week and houses rose 12% to $560. Perth unit rents rose 18% to $520 a week and houses rose 17% to $620 a week Domain chief of research and economics said that while the unit market was affordable during the pandemic as people left the cities behind that had completely changed in the past year, and all of this of course is happening because of our changing demographics.

Rising rents and tight vacancy rates have resulted in an increase in first home buyers according to Australian Bureau of Statistics figures. Its latest lending figures show that the number of first home buyers or first-time home buyers taking out loans increased by 20% in the year to November ’23. The ABS says that first home buyer loan commitments rose three and a half percent during the month of

November. The amount that they borrowed to get into the market also rose by 26% in the last 12 months to an average mortgage of $505,000.

It was of course the more affordable states that recorded the largest number of first home buyer commitments with Queensland leading the pack in November an 11% increase in the month followed by WA 4.7% and South Australia 3.4. The ACT did record a 14.2% increase in first home buyer loans in November but the ABS says that those figures need to take into account that the market is much smaller and more volatile than some of our other states and territories.

Price growth in 2023 means that Australia as a whole has fully recouped any losses from 2022, according to a new report by property analyst Oxford Economics Australia. It says that the national median house price hit a record $939,000 in December 2023.

The report says that total listings for sale are finally starting to lift in Melbourne and Sydney, a trend that they expect to continue in the coming quarters. But the low levels of listings will continue in Perth, in Brisbane and Adelaide leading to further price growth in those cities. Predicted interest rate cuts in late ’24 could accelerate broad price growth again, and that the pace of unit price growth will be faster than house price growth in the two years to 2026, as buyers seek out more affordable options, and our household size shrinks.

While gross rental yields have lifted as well as loans to investors the report says that with many state governments increasing charges on resident potential property investors and targeting the short stay letting market they believe that the chances of rental supply increasing significantly are very low.

According to API’s property sentiment report for the last quarter of 2023, Queensland remains the top choice for property investors but WA is gaining in popularity, and I’ll say surpassing New South Wales. Perth’s property market saw a remarkable 15% annual increase in ’23 making it a focal point for investors and migrants seeking affordability.

Forecasters predict a 10% growth in Perth house prices in the next 12 months. Whether that is sustainable obviously remains to be seen. The tight rental market with 0.4% vacancy rate and a 15% yearly increase in median rents adds to its appeal. Queensland strengthens its position with a 35% preference among investors. Brisbane with a 13% annual property growth contributes to Queensland’s appeal. New South Wales slips a little bit to third place, impacting smaller states as well. South Australia’s rise is halting. The Northern Territory and Tasmania diminish in investor interest. Despite a pessimistic outlook in late 2022, and don’t the forecasters love those doom and gloom headlines?

The property market as a whole experienced very strong capital growth in major cities, including double digit increases as we’ve seen in Perth, in Brisbane in Sydney. Higher home equity and an 8.3% national increase in rents counted elevated repayments. A record 21 a half percent of survey respondents now prioritise buying investment properties in 2024, signaling more optimism. Notably there’s a significant shift towards a positive long-term outlook with 19% prioritising retirement security. A leap from 5% a year ago. Now this change they say is remarkable given that just over half of API’s magazine readership is aged 25 to 44.

A year ago concerns about potential rate hikes dominated but current sentiment reflects confidence in property’s resilience to such challenges. Now as always I will keep you posted on all things property from around Australia as our year progresses. It’s nearly February! Don’t forget to hit the subscribe and like buttons If you are enjoying all the content and I will see you again really soon.


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