Rent

Despite a slight softening of rental demand for the Sydney real estate market, yields are still high and demand remains strong. Property investors are beginning to return to the Sydney housing market, lured by high yields and low interest rates. The current reserve bank of Australia cash rate stands at 3%, a 60 year low. The rapid and dramatic slashing of interest rates earlier this year has been very favourable to property investors. Mortgage repayments have been reduced by up to half for some investors, helping to bump up the total yields on their investment properties. This favourable environment has been luring savvy investors back into the Sydney property market. For the first time in a long time there are opportunities for positively geared property in the Sydney real estate market. Median Weekly Rents Sydney Units Houses Unit Yields House Yields April 08 $380 $390 5.05% 4.15% April 09 $410 $450 5.47% 4.49% The current average weekly rent for Sydney houses stands at $450 per week (up from $390 a year ago) a rise of 15.4% year on year. The average weekly rent for units is currently $410 per week (up from $380 a year ago) a rise of 7.9% year on year. This gives an average gross yield for house and unit of 4.49% and 5.47% respectively. Despite these strong figures, there are signs of a slowing of rental growth over the last quarter. This slowing has been driven by an increase in renters becoming property buyers given the rise in housing affordability, lowering of interest rates and increased first home owners grants. Landlords are also no longer in a situation were they request their tenant to cover any raised interest rate repayments, reducing the pressure to consistently raise rents. However, this slowing is predicted to only be temporary given the large undersupply of housing in Sydney and an overall pend up demand for accommodation. The Sydney rental market is currently in a period of transition with several factors creating an unusual market situation. This is bound to stabilise soon, the major feature that will return the market to normality will be the reduction in the governments first homeowners grant due later this year. For now we are in an unusual situation were it is a great time to be a property investor given the current interest rate environment, and renters are also enjoying a reprieve in rental pressures. Just Rent Sydney Real Estate Agency are a specialist property management agency based in Inner West Sydney. We offer an expert rental property service and have won real estate industry awards for our service. Http://www.justrentsydney.com.au


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