Desperate potential tenants are offering to pay above market rents and up to 12 months of rent in advance to secure a property, according to Sydney leasing agents.
In Melbourne, the most expensive rental suburb is Brighton in the inner south and in Brisbane it is inner-city Ascot .Strong net overseas migration is expected next year in most Australian cities, according to the federal government’s Centre for Population. The permanent migration cap has been lifted from 160,000 to 195,000 for the next 12 months, and more than 2 million applications have been processed since June.
Sydney and Melbourne are returning the smallest gross yields of 2.7 per cent and 3.1 per cent respectively for houses, but growth is underwritten because they are gateway cities for immigrants and overseas students, according to property specialists.Apartment gross yields are higher than houses. Darwin is at more than 7 per cent, Perth 5.7 per cent, Canberra and Adelaide at 5 per cent, Hobart 4.4 per cent, Melbourne 4 per cent and Sydney 3.6 per cent.
“This creates significant development and investment opportunities across many apartment markets,” a recent report by the consultancy concludes.Some lenders, such as Commonwealth Bank of Australia, have special offers for investors. The bank has cut its three-year fixed rate by 100 basis points to 5.59 per cent for principal-and-interest investors – that’s about 40 basis points lower than the same term for owner-occupiers.