The cost of renting a house in Australia has increased now more than ever.
Earlier, the Reserve Bank of Australia (RBA) had predicted how the rents were likely to drop in the next few months. The latest Domain Rent Report, however, states otherwise.
According to the report, the median rental asking price for house rents has hit a national high of $471 per week. It comes as an increase of 4% from the last month.
Much like the increase in housing prices, the rise in renting cost came about as a post-Covid response.
Lockdown and work from home culture have made more Australians uncomfortable with a constricted living situation.
People now want to move into bigger, greener, and better spaces as an emotional response.Thus, there has been a rise in the demand for investment properties.
The demand outweighs the supply since more Australians are interested in selling their old property than converting it into an investment property. Hence, the rise in prices.
While this rise in the cost of renting can be jarring for tenants, from an investor’s point of view, it couldn’t get better than this!
Why?
- As of yet, we have not seen many investors hitting the market like in 2015. Thus, the rental prices are likely to stay up for longer.
- Buying an investment property when the interest rates on home loans are low is a great investment strategy.
- Deciding to rent out your existing property rather than selling it off means you can have a stable income source. The investment property will yield higher profits in the long-term than from a one-time lump sum sale.
- Your rental income is a strong income source to show during the mortgage application process. It will help you improve the serviceability of your home loan, and you will get better deals.
Looking to purchase an investment property?
Our expert mortgage brokers can help you find a lender that best suits your profile.
Contact us on 1300 889 743 or enquire online and we can then discuss your situation.