Rental returns continue to rise

Rental returns continue to rise

The latest figures on the rental market have confirmed what most observers already suspected; rental returns are continuing to rise in response the tightening of supply of rental properties across the country.

The latest Quarterly Rental Review from Corelogic was released last week, providing a snapshot of the rental market around Australia for the three months ending in June 2022. This report showed that residential rents in metropolitan areas have risen by 9.1 per cent over the past year, including a rise of 2.9 per cent during the June quarter, whilst regional areas have experienced a year-on-year rise of 10.8 per cent.

Clearly, this rise in rental returns is being driven by an increasingly tight rental market. The report found that national vacancy rates had fallen to a record low of 1.2 per cent, down from 2.2 per cent at the same time last year.

As we mentioned in A POST EARLIER THIS YEAR, numbers like these are likely to have an increasing number of Victorians thinking about becoming a property investor for the first time, or to increase their property portfolio if they’ve already become a rental provider.

However, whichever category you may fit into, it is important to remember that being a successful property investor relies on selecting the right property in the right area, and paying the right price at the right time.

If you look behind the headline numbers in the Corelogic report, you will soon see that there are large variations in the vacancy rates in different parts of our state, just as there are different expectations for future capital growth.

With rising interest rates likely to delay the purchase of some first home buyers, and an increase in temporary residents from overseas being forecast, the resultant increased competition between renters is likely to push average rents even higher. That’s not great news if you’re currently renting and trying to save for your first home, but good news if you own a rental property or two.

With this in mind, it’s an ideal time for anyone considering taking the first steps towards becoming a property investor to give us a call at Ian Reid Buyer and Vendor Advocates. Our team is always happy to have a confidential chat about the best ways we can assist you, so feel free to give us a call on 9430 0000.