Image via Mr Thinktank
After the RBA left interest rates at a standstill yesterday, rental market pricing was questioned.
With a 4.9 per cent surge in Melbourne’s dwelling values last month, the Australian property market has now grown by almost half a trillion dollars in half a year.
For students who are future homebuyers and renters, there’s no denying it’s time to push through the business jargon to understand what this means.
City Journal spoke to a few experts in the housing and property field to break down the statistics.
1. Interest rates are close to a record low
While this is bad news for property investors, renters can look forward to a few more houses to choose from.
Lower interest rates will leave property buyers in a better position with less loans to pay off.
Chief economist from the Housing Industry Australia, Harley Dale, said, “Very low interest rates mean we’ve been building a larger number of homes … bringing more supply to the market.”
More homes equal less demand and, according to Mr Dale, the simple law of ‘demand and supply’ will cause a downward pressure on rent prices.
2. The winter market is a slump market
If you’re looking at shifting residences, avoid the effort until warmer months roll around.
Head of the rental department at Nelson Alexander Real Estate, Sue Van Der Linden, believes prices are at a premium but come September, when the weather fines up, “You’ll find prices will come back to where they were prior to the winter market.”
3. The inner-city market is buoyant
Reports have been made that international students are set to ‘power housing’ with a rise in demand for rental accommodation.
While migration does impact the market, it depends on what sort of house you’re looking to rent.
Mrs Van Der Linden said foreign students are often willing to pay premium but, “they are usually looking for an apartment and don’t often enter into the share housing market”.
4. Melbourne students: you’re in a better position than Sydney
Over the last 10 years Sydney has experienced a significant housing shortage.
Mr Dale calls it an ‘unleash in demand’ that has built up over many years.
The factors, according to Mr Dale, include “a change in state government, renewed confidence in the sector and lowered interest rates”. These have all come together to create more pressure on rentals with higher prices.
5. Successful renting is all about research
It’s not simply checking for leaks or holes in the ceiling, but researching the market you’re renting in.
“If you’re looking for a share house in a middle-ring suburb, get a feel for what similar sized properties in the area are renting for,” Mr Dale said.
Making points of comparison is important, he said. “Different types of houses will be sought after differently.”
