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 "Let's hear a cheer if you still own investment property in today's market. With many investors getting out while the going is still good, rents are finally in a position to be raised again." - Mark |
| Rents to rise as investors flee |
| By Anthony Klan |
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March 09, 2005 LANDLORDS are finally receiving some good news, with rents about to rise in most capital cities as vacancy rates tighten. In Sydney, rents are estimated to rise by between 5 and 10 per cent this year as vacancy rates fall to 2.4 per cent – the lowest level in almost five years. According to data released by the Real Estate Institute of Australia yesterday, Brisbane rents have already increased by 3.6 per cent in the December quarter. "Once vacancy rates get into the two's it starts to get difficult – if you get to any lower than two there'll be real problems," Real Estate Institute of NSW president Rowan Kelly said. Mr Kelly said one of the reasons for the increases was the drop in the number of investors in the market. Apartment rents in Melbourne were flat in the quarter, but grew by 3.1 per cent in Adelaide and 5 per cent in Darwin. Macquarie Bank head of property research Rod Cornish said rents were expected to show solid growth increase over the next four years. "Much lower investor demand and rising construction costs mean we're not getting a lot of projects up and running," Mr Cornish said. He said vacancy rates would remain firm – and in some cases tighten – this year in most capital cities except for Melbourne, where the vacancy rate was currently one of the highest in the country at 3.8 per cent. "Vacancies in inner Melbourne could rise a little bit this year because this is quite a strong year for construction in Southbank, the Docklands and the CBD," Mr Cornish said. "But vacancy rates generally are very low and they will continue to be low." Mr Cornish said rents traditionally lagged a tightening of vacancy levels. "It's going to be a slow process at first, really picking up, but really, from mid-2006 onwards, we expect to start seeing fairly significant rises in rents." Reference: The Australian. 
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