What is next for the rental market?

The media keeps talking about a rental crisis and rental prices increasing by record amounts. Is this the case? As mentioned previously we are seeing a softer market with prices down 5% to 10% since Easter, which I think is reflected by the traditional seasonal downturn we see every Winter where less people move and demand drops. Also, some people have just reached the maximum capacity that they can spend.

However, I don’t expect this to continue. As the weather warms up demand from tenants increase, a lot of properties in Manly and surrounds become holiday lettings making it a smaller pool for tenants to choose from. This year we are also starting to see investors sell their properties as the cost of their mortgages and for many the changing from cheap fixed interest rates to the higher current ones will reduce further the amount of rental stock. The buyers for these properties will be a mix of investors and first home buyers. Add to this the increased immigration and competition and prices will increase sharply quite soon. Statistics from the “Corelogic July Rental Report” show rental prices Sydney wide increasing by 12.3% over the last 12 months. It also has Clontarf and Balgowlah Heights at 4 and 5 on the most expensive suburbs in Sydney to rent. At a medium price of $2,026pw and $2,020pw respectively.

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