20th January 2011
A Word Covering Rental Property
The Australian house market is heading into a fascinating period. We’ve written this article to offer advice to anybody considering renting or buying there. Spring has arrived and for letting agencies and those looking to buy this period is often seen as a preview to what the remainder of the real estate year has in store. In September, the first auctions should set the tone and provide a peek at what’s to come. The recovery in two thousand and nine was the end point of a difficult three years for the property market, which saw massive growth in two thousand and seven but collapsed in two thousand and eight because of the credit crunch. Spring has revealed a lot of available properties, so it should be interesting to see how the remainder of the year fares. An issue still exists with the steep price of houses. In six straight quarters there was a decline in the number of Australians able to afford housing. What this indicates is home ownership is currently unfeasible for many Australians. In the last decade of the twentieth century the income percentage needed to pay for home loan payments peaked at thirty five percent before falling, but for a long time it has been steadily rising, almost matching that high figure.
There are a few proposals to ease the fall. One is to create a policy which looks at already settled residential districts and increases their housing density. The issue with this is that in spite of fresh developments providing low-priced homes for sale, the people already living in the residential district must spend more money on taxes. The reason for this being that new roads, power lines and other infrastructure will need to be implanted for the proposed housing. Studies run by the real estate Institute of Victoria have already demonstrated that housing density growth has served to keep affordability low.
The situation is essentially the same as it was for renters. The market for rentals is still extremely tight as the number of rental properties hasn’t grown. A long time will pass before the rates of vacancy grow higher than their current low values. In many places the rates sit between 0.5 percent and 2 percent. It has been a trying time for anybody wanting to rent. 3% is a perfect vacancy rate. This rate means renters should find a home which suits them and private buyers get a good profit from their property. A long time has passed since the market saw a three percent rate on vacancies though.
Removing the stamp duty charge for private investors is one plan to increase the number of properties available for rent. People could see this as an excessive tactic however, since we must encourage more private buyers into the market.
Measures must be taken that will make the market fair for everyone; that way people will see the value in purchasing new homes and renters will be able to find a place to live.
