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What is driving rental vacancy rates?
What is driving rental vacancy rates

What is happening in the rental market this year and what factors are driving changes?

Kate Hill provides insight into the property market and explains why these changes are occurring and what may happen in 2024.

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Hello everyone how are you all doing out there? It’s Kate Hill as always bringing you the best unbiased and honest content on property along with fantastic hints and tips.  

Stay tuned today to hear about what’s in store for us and property in 2024.

[Music] Now I’m happy to say that this time last year in spite of all those interest rate rises I predicted property growth during 2023 and the way I see it is that the factors that put price pressure on properties this year are set to continue next year.

So what I’m talking about is billions and billions of dollars on major infrastructure expenditure, population growth thousands of new overseas migrants arriving and crucially low stock levels.  

There is and will be more buyer demand than there is supply of properties available in many of the property markets around Australia. When you add in the very real possibility that interest rates might be heading down at some stage next year you don’t need to be Einstein to work out that market conditions are looking promising for property buyers.

For anyone who purchased a sound and well-located property prior to the pandemic they are probably sitting pretty when it comes to capital growth given that property prices continue to be significantly above the level that they were back then.

Now this likely means that they may have significant equity that can help increase  

their portfolio and their future financial positions. Millennials and Gen X’s aged in their  

mid-30s and 40s who may have been homeowners for a few years now are the prime candidates to make their equity work harder for them. That’s you.

And that’s because they are likely in the prime income earning period of their lives also plus they also have plenty of time in front of them to let the magic of compounding capital growth happen. 

Unfortunately many property buyers stayed on the sidelines this year because of those alarmist  predictions that never came to pass yet again.  

Property prices have been moving upward in many locations so it’s vital that anyone considering a property purchase doesn’t find themselves looking back with regret when they had the opportunity to buy and that means do something now.

For property investors on a tight budget there are still pockets that offer prime opportunities to purchase an affordable property with good long-term prospects around the nation. In many parts of Australia especially our biggest capital cities it’s extremely difficult to find a property priced under $550,000 or $600,000 but there are suburbs where affordable homes are still available.

Now as buyer’s agents we’re currently working with a range of clients for whom budget and reasonable cash flow are pretty big considerations.

The cost-of-living crunch and the burden of high interest rates has forced many prospective purchasers to tighten their belts and those active in the  market face really strong competition. Though with a lack of supply like I said before and  a rapidly growing pool of buyers.

Now finding investment grade stock is not impossible. It’s pretty tough at the moment and it’s vital that investors do the required amount of due diligence and engage the services of a qualified buying experts to help them. Now we are looking forward of course to helping all of our dear clients start or expand their property investment portfolios  in a myriad of locations around the next year.  

So happy Christmas everyone have a really great and healthy start to 2024 and I will see you all again soon. Don’t forget to like and subscribe. Give me that as a Christmas present.

Bye

Hello everybody out there. How are you all doing? I am Kate Hill bringing you the best and unbiased and honest content on property along with some really awesome hints and tips and area location analysis.

Stay tuned today for all your latest property news.

[Music] Rents are likely to start rising again throughout Australia driven by demand from university students who are starting the new school year.

Analysis from SQM Research shows that record high rents mean that some landlords have pocketed tens of thousands of dollars more in rent in the past 12 months.

SQM Research says that there is a renewed tightness in the rental market across the board after easing slightly in December last year. Vacancies were already low to start with due to the ongoing rental shortage.

So this renewed increase in demand can only push rents higher at a rapid pace, certainly over the first half of the year they said.

The national vacancy rate is 1.1%. Adelaide’s vacancy rate is 0.4 Perth, 0.5 Brisbane and Melbourne 1.1.

Sydney 1.3. SQM analysis shows in the past month rents increased by 2.4% in Melbourne, 1% in Sydney, Brisbane, Canberra and Perth and by almost 1% – 0.9% in Adelaide.

SQM says that rents are surging just about everywhere. Easing planning regulations will have more of an impact on improving housing supply than abolishing negative gearing, a new report reveals.

So this is a report by the Centre for Independent Studies which says it is restrictive planning rules that have added more than 40% to the cost of a house in cities such as Sydney and Melbourne.

The housing affordability and supply restriction report says that property taxes may only increase the cost of a house by 4%.

There are arguments from the tax policy perspective that negative gearing and the capital gains discount should be considered, but it is not relevant to the question of housing affordability, the report says.

Their analysis shows that if housing stock is increased by just 1% then rents and prices should drop by 2.5%.

The effect of those tax discounts on housing prices is tiny and zoning restrictions need to be relaxed and the states should consider overriding councils when necessary, according to the report.

Stamp duty charges of skyrocketed, costing property buyers up to six times more than in the 1980s.

A new report by PropTrack says that in some states stamp duty on a medium-priced home are as much as $45,000.

And in real terms relative to income the research says that stamp duty is six times higher in the Melbourne and Hobart markets than it was in the early to mid-80s. 5.4 times higher in Sydney. Stamp duty is 5.5 times higher in Brisbane, 4.5 times higher in both Perth and Adelaide.

PropTrack says that the figures show that reform is critically needed to allow the property market to operate more efficiently.

Stamp duty is obviously a large upfront cost for home buyers.

They have to save that on top of a deposit, and they say that negative gear hearing is a tax rort.

Policy makers must consider the indirect impact that stamp duty has on other parts of the economy and on people’s lives.

Encouraging developers to deliver more units in regional areas could help regional towns cope with the growing populations, the Master Builders Association has told a National Housing Summit.

They said that not everyone moving to the country is looking for that big house with a large block of land.

The summit was hosted by the Regional Australia Institute, the RAI, which says there is an increasing demand for workers in regional areas but there isn’t the accommodation to house them all.

Its analysis shows that median values are now more than $605,000 in the regions and vacancy rates are 1.2%. the RAI called for the federal government to apportion 40% of the Housing Australia Future Fund to regional areas.

It wants the fund to aimed to build 450,000 of the homes of its 1.2 million target in regional Australia.

Anglicare says that regional housing is no longer more affordable than the cities. And finally in a sure sign that they think interest rate cuts are looming the big banks have started to cut fixed interest rates.

Macquarie, AMP, Bendigo, Adelaide bank and the Bank of Queensland have all cut their fixed rates in the past three months, according to Mozo, a finance resource company.

Their research and compliance manager has said that fixed rates are finally starting to become more competitive.

It comes as the RBA is so far deciding to keep interest rates on hold. Banks are starting to become more confident that the next change in the cash rate whenever that happens will be a cut, and probably more than one cut, they said.

When setting fixed rates banks try to look ahead and implement anticipated future changes into their fixed rates.

As they become more confident of cuts later this year fixed rates will start to fall even further.

They say that the lowest variable rates are at about 6% and now fixed rates are beginning to drop below that particularly for those willing to lock in for 2 or 3 years.

As always I will keep you posted on all things property from around Australia. Please do like and subscribe.

Very much appreciated and I hope you are enjoying or continue to enjoy all the free content and I will see you soon.

Bye

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