Rental markets expected to continue growth in 2014
Property investment remains a viable option for anyone interested in supplementing their income in the near future, with the latest release from the Australian Property Monitors (APM) illustrating a great market landscape for investors to enter.
The capital cities of Australia are experiencing some changes to rental yields, which could help potential investors make informed decisions. Nationally, the median weekly rent for houses increased by 0.9 per cent during the December quarter.
Units saw a slight drop in median rent, decreasing by 0.4 per cent. However, this is a marginal drop, with the number of new developments commencing across the nation in anticipation of the population boom aiming to curb this trend.
Australian Property Monitors Senior Economist Andrew Wilson said he expects rental yields to grow in the Sydney and Melbourne markets in the future, after posting great results for the December period.
"Rental yields for houses in Sydney continues to weaken as a result of strong price rises and a surge in investor activity. This year, we can expect to see rising supply and moderating demand put further downward pressure on house rental growth in the city," said Mr Wilson in a January 16 statement.
For example, Sydney saw the median rent for houses in the city remain at the steady level of $500 for the entirety of 2013. However, the rent for units grew by 5.4 per cent over the last 12 months, increasing from $460 up to $485 at the end of last year.
"Recent trends in capital city rental markets can be expected to continue to consolidate through 2014. Increased supply generated by rising investor activity and new apartment building will continue," said Mr Wilson.
However, investors interested in an increasingly hot investment spot should turn their attention towards Brisbane. The housing market saw a 1.3 per cent increase in the rental market over December, while units grew by 1.4 per cent over the same period.
This has led to a 2.6 per cent increase in house rents over the last 12 months, which can be put down to the increasing number of developments occurring within the inner city.
"Brisbane continues to provide investors with the highest gross yields for both houses and units of all the major capitals. With prices growth likely to accelerate this year, expect increased house investor activity," said Mr Wilson.