No end in sight for rental squeeze
Without wanting to state the obvious, it’s clear that one of the most discussed topics of 2023 has been the rising cost of living, with increased rents and mortgage interest rates being one of the key factors impacting this issue.
In fact, depending on which set of market statistics you read, it seems that average rents around Australia have risen by something close to 10 per cent in the past twelve months alone…and we all know what has happened to interest rates over that period as well.
Some people might have been assuming that we might be headed into a more stable period for the rental market in 2024, but the bad news for renters is that the latest forecasts would suggest something different.
Indeed, the latest research from CBRE is forecasting that the increases in rents we have been experiencing lately look set to continue for the next few years. Their latest update has predicted that metropolitan vacancy rates around the country will fall to just 0.8 per cent by 2028. This is a substantial tightening on the current vacancy rate of around 1.8 per cent, particularly when you realise that this is already well below the average of 2.5 per cent over the past decade!
The international property group has also forecast a continuing escalation in rents, with two-bedroom apartments to see an increase of around 26 per cent by the end of 2028, and some areas with higher demand experiencing increases above 30 per cent in that period.
Of course, adding to the ongoing shortage of supply of rental properties is the current situation where developers are quite hesitant to commence the construction of new apartment buildings due to the ongoing economic uncertainty and concerns about increased building costs.
So, for those hoping for an easing of the current rental squeeze in the near future, it seems the light at the end of the tunnel could well be an oncoming train. Good news for those planning on becoming a property investor, but not so much for those planning on renting for the next few years.
So if you need any help in taking your next step in the property market, whether that means securing your first home to escape from the tight rental market, or becoming a property investor to make the most of the changing conditions, don’t hesitate to give the team at Barry Plant Gladstone Park a call this week on 9330 1088.
Cheers,
Bill Karp - Director
Barry Plant Real Estate
Gladstone Park