2023 has commenced with increasing rents across almost all major capital cities and low vacancy rates.
Neither Sydney nor Melbourne had more than 1% of rental properties available for lease in January, a record low for both of these capital cities.
Dr Nicola Powell, Domain’s Chief of Research and Economics, says the current rental boom is likely to persist as tourism, overseas migration and foreign students amplify demand for rental properties.
“The highly competitive rental market that we saw last year is going to be amplified as Australia embarks on the busiest period in the rental calendar in January,” Powell said.
“Due to a seasonal lift, those on the hunt for a new lease this quarter will find slightly more choice as the rental market moves into its busy changeover period at the start of the new year, freeing up some homes for a short amount of time”.
In a similar vein, My Housing Market’s Chief Economist Dr. Andrew Wilson, anticipates a continued shortage of rental accommodation as higher interest rates restrict first-time buyers and a surge in immigration drives up rent demand. He believes this will only be limited by “tightening household budgets and falling real incomes.”
An estimated 40,000 people are currently arriving in Australia for immigration purposes each month, according to the Australian Bureau of Statistics. This is in stark comparison to the 1,000 to 2,000 people arriving in Australia each month throughout 2020 and 2021.
While there has been a fall in home values nationally of 8.4 per cent, affordable and regional property values have been relatively immune and in some cases have defied the national trend due to exploding population growth in new development areas.
In fact, in 2022, despite the -5.2% decrease in home values across the Australian property landscape, AllianceCorp achieved an average of 18% growth across the states of Victoria (11.3%), Queensland (32.2%) and Western Australia (12%).
Smart property investors don’t target a certain type of property in a certain area/state, and don’t wait for the market to ‘come down.’ Smart property investors understand that it’s about targeting investment grade properties situated in growth areas and investing when you can next afford to.
With demand at an all time high and supply at an all time low, landlords are in a very favourable position to increase their weekly rents and improve their cash flows. Now is the perfect time for investors to take advantage of this high demand for property and maximise their growth.
So if you’re thinking about kickstarting your property investment journey and generating a passive income to give you more financial freedom, simply fill out the form below to request a no-obligation strategy session with one of our esteemed Senior Property Wealth Planners valued at $495 for FREE.