For many, investing in the property market is something that they dream of for a long time before making the move.
Asking questions like:
Where is the best location for an investment property?
Should I invest in a house or an apartment?
Am I better to buy an existing property or buy new?
Is now the right time to invest?
These are all very normal questions, in this article we will explain what we are seeing in the current Australian rental market to help you answer some of these questions.
The words RENTAL CRISIS are being thrown around a lot lately to describe the rental situation currently facing Australians, but what is causing many industry experts to use these words in describing the current rental market?
Put simply there are a lot fewer rental properties on the market and a lot more people looking.
Why is there such an imbalance in the market?
During the pandemic, when international boarders closed many investors left the market, selling their properties especially apartments in our major cities. This gave buyers who had been priced out of the housing market the opportunity to secure these apartments and live in them as owner occupiers. This exit by investors decreased the total number of rental properties available nationwide.
With international boarders re-opening along with people returning to our major cities for work, the demand for apartments has increased exponentially.
According to PropTrack, the rental demand for apartments especially in our major cities has outstripped demand for houses. Compared to March 2021, demand for apartments has increased by 16.6% whilst houses fell by 4.4%.
According to SQM Research this surge in rental demand follows the lowest rental vacancy rate Australia has seen in 16 years.
This imbalance in Australia’s rental market does not look like it will ease any time soon. With an increase to immigration targets making up for the 2 years of no immigration during pandemic and more first home buyers looking to apartments to get on to the property ladder. This increase in demand will put even more pressure on Australia’s rental market.
Whilst not good news for those searching for a rental property, it is great news for those entering the investment market as all these pressures combined will drive up the weekly rental prices allowing for greater return on investment.
What are the benefits of buying a new property over an established one?
There are many benefits to buying new apartments over existing ones.
New properties are far more attractive to renters than existing apartments meaning you may be able to ask a premium on top of the suburb average weekly rent.
You may be able to claim a tax depreciation allowance for the property over the first 10 years of ownership putting again allowing for greater returns.
When buying a new property there will be no need for added expense to upgrade and renovate the apartment to achieve maximum weekly rent.
If you have been considering buying an investment property and would like to take advantage of the current rental market in Australia favouring investors, Tallpopie can help in finding the right apartment. We have multiple developments on offer throughout Australia, some already or soon to be completed.