Good news/bad news on rental trends
It’s been a period of change and challenges for the rental market around Melbourne over the past couple of years.
If you’re a renter, the substantial increases in median rents, along with the ongoing shortage of available properties for rent, has certainly gained plenty of attention in the media.
Of course, if you own a rental property, the combination of increases in interest rates and additional taxes on investment properties has had its challenges too.
So it was interesting to see the latest research from CBRE which is forecasting that the increases in rents we have been experiencing are set to continue for several years to come!
The international property group has predicted that metropolitan vacancy rates around the country will fall to just 0.8 per cent by 2028. This compares with the current vacancy rate of 1.8 per cent, a figure that is already well down on the ten-year average of 2.5 per cent!
As a result of this scenario where increased demand for rental properties is likely to be met by inadequate supply, CBRE has forecast that rents for two-bedroom apartments will increase by around 26 per cent by the end of 2028, with some high demand areas experiencing increases above 30 per cent.
Of course, adding to these issues is the current situation where developers have become increasingly hesitant to commence the construction of new apartment buildings as a result of the economic uncertainty and concerns about increased building costs.
Add all these factors together, and it seems that the recent negative news for renters is not likely to end anytime soon, whilst the outlook for rental providers seems more positive, particularly with more economic commentators starting to talk about the likelihood of official interest rates falling again at some point in 2024.
If you need any advice or guidance on taking your next step in the property market, whether that means securing your first home to escape from the tight rental market, or becoming a property investor to make the most of the changing conditions, don’t hesitate to give the team at Barry Plant Thomaston a call this week on 9466 3233.
Regards,
Con Constantinou
Barry Plant Thomastown