What the rental market tells us about property prices

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What the rental market tells us about property prices.

It’s easy to find a tenant and rents are rising.There may, it seems, be a limit to falling prices in Melbourne.

Renting numbers offer an insight into the real estate market. Source: RBA Statement on Monetary Policy February 2019Overall, the income Australian landlords are getting from rental properties is growing more slowly. Advertised rents are getting more expensive in Melbourne, but cheaper in Sydney. Many tall towers that had their foundations concreted in the boom time will get their final coat of paint amid the bust. Such is the cyclic nature of property development — by trying to meet peak demand, they create an oversupply that fuels the bust. What looks like a rational course of action for one developer might not be rational if every developer does the same thing at once.negative effects on both property prices and rentsIn Melbourne, that question is not such a concern.

If for example they have a $2000 shortfall between the rent they collect and their total costs of ownership, they can subtract that from their salary or wage income.For a person paying 45 per cent tax on the marginal dollar of income, that would save them $900 a year.

 

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jasemurphy 'In Melbourne, that question is not such a concern. With vacancy rates falling and strong population growth, there is apparently a willing market for those new homes. But in Sydney and Brisbane?'.. conditions aren't similar in Brisbane? Strong growth, falling vacancy?

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