By
Pino Tedesco Director Metropole Buyers Agency Sydn
Good news for property investors – rents
are going to increase significantly over the next
4 years due to a shortage of properties and in
particular Sydney rents are set to soar.
Property investors have already enjoyed rising
rentals throughout Australia over the last few
years as strong population growth, a lack of
new home construction and cautious investors
not putting
as many investment properties into the rental
market have caused rentals to increase in all
our capital
cities. But figures obtained by The Daily Telegraph show
an estimated 7,300 new dwellings will be built
in Sydney this year, the lowest rate of growth
in more than 50 years and roughly a third of
the homes built in 2003. Interestingly, across the border in Adelaide
- a city with a population one quarter of the
size
of Sydney - about 7,500 new homes are scheduled,
while Brisbane expects 13,450 new homes to be
built and an estimated 23,000 new dwellings
will be built
in Melbourne this year. With Sydney's population expected to rise by
close to 23,000 this year and rental vacancies
already
running at a historically low 1.1%, economists
suggest Sydney rents could shoot up a further
12% per cent in 2009, on top of last year's
8% rise,
taking the average rent for a 3-bedroom house
to over $400 a week. The undersupply of properties is likely to underpin
property prices and rentals for some time. The
National Housing Supply Council report out earlier
this month estimated an 85,000 dwelling shortage
in June 2008 and suggested that this gap will
to grow to 203,000 by 2013. In particular, Sydney requires more medium-to-high
density development and with the high cost of
new development plus the funding restrictions
to developers
it is unlikely that we will see many new major
projects for some time. Putting all this together there is only one way
for Sydney rents to go – and this is UP!
And while this may be bad news for tenants, it
is good news for property investors.
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