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What are the biggest drivers with rental increases?

Discussion in 'Property Market Economics' started by qonyx_sydney, 24th Jul, 2015.

  1. qonyx_sydney

    qonyx_sydney Well-Known Member

    Joined:
    18th Jun, 2015
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    Location:
    Sydney
    So i understand the main driver is supply/demand driven...However want to know the view of some of the more experienced punters on the forum.

    Sydney has current supply issues yet rents haven't had a good bump for quite some time and wonder why

    Some key points;
    • Low interest rates means no upward pressure on rents as people will generally look to buy as can be cheaper until property prices increase
    • As property prices increase so when/how does the yield catch up begin?
    • Are rising interest rates the logical point when rents rise because;
      • Higher interest rates means a better economy and wage growth.
      • Higher interest costs which make buying a PPOR less attractive and decreasing rental stock
    When you are all forecasting rental growth for your IPs what % growth do you use? 3%,4%.5%

    What do people think?
     
  2. Arashi87

    Arashi87 Well-Known Member

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    19th Jun, 2015
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    101
    Location:
    Sydney
    Increase wage first :D
     
  3. Munga

    Munga Active Member

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    20th Jul, 2015
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    Location:
    Europe
    So with wages remaining fairly static could that be keeping rents static? Do suppressed rents become a potential trigger for a cooling off of the market?
     
  4. Coota9

    Coota9 Well-Known Member Premium Member

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    Location:
    Melbourne
    Believe lack of wage growth will be balanced with reduced rental properties available for rent due to new APRA laws putting the screws on the investment lending market..
     
  5. wombat777

    wombat777 Well-Known Member Premium Member

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    PMs and owners that keep their eye on the ball. I was staggered when I rented the long periods between rent increases. Not that I was complaining.
     
  6. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Location:
    Sydney & Gold Coast
    I had a good run in my first rental.

    I moved in at end of 2004 at $195/week.

    Rent didn't move for a few years, then was nudged to $210/week. I was a trouble-free tenant.

    Eventually rent climbed to $255/week but neighbours were paying over $350 at that point.