Rental prices are increasing at the fastest rate in 15 years in Australia. This is the most significant increase recorded since May 2007. As the rental market is recovering from the effects of COVID-19, there is suddenly a strong demand for leases in regional centres.
CoreLogic’s Rental Review for the March 2021 quarter revealed a surge in national rental rates of 3.2%. Across the combined regional markets, rents soared higher at 4.1% while rents in the combined capitals increased 2.9%.
Director Tim Lawless, says “While housing rents are rising at the fastest pace since 2007, the headline reading hides the sheer diversity of rental conditions around the country. At one end of the spectrum, we have Perth and Darwin, where annual rental growth is well into double digits and accelerating. At the other end is Melbourne and Sydney, where rents are down over the year.”
The drivers of the rental growth are diverse, with the regions, Darwin and Perth collectively driving much of the increase. Darwin recorded the most rental rate growth in the first three months of the year at 7.7 per cent.
Why is the rent increasing?
- During COVID-19, many people moved home or moved away from CBD locations. But now, more people are returning to the CBD for work and taking up rentals again, particularly in Sydney and Melbourne.
- There is an increase in demand for rentals, but the supply is dwindling.
- Tenancy duration has been slowly rising across the state as more people face a lifetime of renting. They are looking for the best apartments and locking them for several years.
This is great news for investors!
The regional areas, aside from Sydney or Melbourne, have low mortgage rates. They provide investors with positive cash flow opportunities from the outset.
There are some suburbs where people aren’t staying put for an entire year, so it’s good to check the rental vacancy rates and yields before looking at an investment property.
As long as you are aware of the risks associated with your investment opportunities, we can help you apply for a mortgage!
Please talk to us on 1300 889 743 or enquire online to find out which lenders can help with your investment loan.