Rental Market Trend in Australia

Dec 15 2010 / 10:20 am Was written by Atwell & Co. Comments Off

The property market is quite a complex industry one can play around with. Overtime, you may find various trends in the property market that shows the primary interest of home buyers and investors. So how do rental vacancy rates work? Basically, you have to understand that it fluctuates the same way property market does. Nationwide, the established fluctuation rate is within the bracket of 1.5% to 5%.

At present, it takes a decade for the vacancy trend to evolve. Considering this, vacancy rate is likely to go up long term. Tedious to gauge; reports show that the average vacancy rate in Australia is nearly 1.5% which translates to almost 5% unoccupied days per year. Highest contribution came from Sydney, which is considered as having the highest market demand that amounts to 1% vacancy rate. Meanwhile, 2% vacancy rate is observed in cities with fewer demands like Perth.

Market opportunity can be anticipated in the near future for investors who are looking for rental returns as driven by the increased rental rates which exceeds the prices of basic commodities. There may be few home buyers due to this trend instead a lot of people will opt to just rent a place instead of acquiring it. That said; a wise investor should consider some factors that will help them identify quality prospects that will not move out soon before investment is gained. Such factors include housing costs, lifestyle and the structure of the family.

Age is usually a deciding factor whether you will have to acquire a property or just rent a place. By looking at the housing cost in the property market comparing it with the average income, you will be able to identify your prospects. For instance, young couples are likely to rent a place instead of purchasing one since they are most likely at the bottom of the corporate ladder assuming that they are working in an office. Similarly, young couples are likely to start their family investing money in the bank instead of paying property mortgage. It has been a trend in the property market to see young people focused on financial security rather than residential security. Once they have saved more than they can spend, that’s the time when they will decide thinking about investing on their own property.

The Australian property market tweaks this trend a bit more favorable to home buyers. Various real estate investments have been established to support first time investors. This presents a serious challenge to the rental market.

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