Rents surge! Last Qtr highlights surge as New Housing Numbers Slowdown

The REIV, RPdata, PriceFinder and around eight other statistics groups never seem to form alignment on the actual activity in the marketplace. One key stat that is highlighted is the Rental Growth in Melbourne which has been staggering in the last quarter of 2018. The average rental for Houses moved from $420 pw and increased to $440 pw which is a 4.7% increase within a single quarter. This has to classified as staggering in anyone's language and appears to be overshadowed by other media focus. 

The new housing numbers slowdown which we have talked about during the last 12 months, is now starting to come into effect. This will progress around Australia and the last Quarter of 2018 proves this fact with the following Cities seeing rental growth surging:

- Melbourne (mixed reports)  but based on numbers House Rents moved from $420 pw to $450 pw

- Perth rents greww by 2.9% for the Qtr

- Brisbane rents grew at 2.4% with this region tipped to have the strongest demand over the next 3 yrs (AFR)  

- Adelaide grew by 2.2% with being the most patchy as pockets of substantially stronger & then others at a balanced level.  

- Hobart 1.8% growth - Although this region doesn't have the population growth so this will balance out.

- Canberra grew by 1% which is well above CPI.

- Sydney had a decrease & Darwin remained still.

A short supply of new property starts means we are falling under the demand of supply, through basic population growth, internation & state based migration and in real terms affordability. What we are seeing is the high end fall back but out core balanced style of investment property gaining solid rental growth.

The slower and reduced numbers of new property supply simply comes back to tighter borrowing criteria which has been installed over the last 18 months by APRA through to the banks although this came months after the signs the boom had been completed and we were back into a standard marketplace. This has then commenced nothing but fast tracking a new cycle of increasing rents, which will reach a point where again we will see a surge on property. The Banking Royal Commission will take the focus away on property for those who are purely media reliant for a period of time. This appears to be a unique window where property prices are representing great value, the competition is more levelled and balanced, providing time to find the right property match for your needs. When we look back in hindsight in the future we may find this was a very balanced time to secure the right properties as the foundation of a quality property portfolio.