Rent activity creates opportunity for investors

By Rich Harvey, CEO, propertybuyer.com.au

While rent in most capital cities either declined or remained flat during the March quarter, Sydney once again led the charge for Australian property investment potential. Recent data from Australian Property Monitors (APM) shows that the New South Wales capital city saw rents increase during this time period, particularly for units.

"There has been some relief for tenants generally over the March quarter with flat or falling rents reported in most capitals. Sydney, however, continues to record unit rent increases as affordability barriers impact on house rent growth," stated Dr Andrew Wilson, senior economist for APM.

"Melbourne has reversed the recent lengthy trend of flat or falling rents but rises are coming from a low base in what remains a generally tenant-friendly market. In Sydney, affordability constraints, together with growing preferences for inner-city apartment living, have seen rents move to a point where the median asking rent for a unit is just $10 less per week than a house."

There are two important takeaways for those seeking to buy investment property in Sydney.

First, APM pointed out that demand for inner-city apartment living is on the rise. This could be great news for not only property buyers in Sydney's central business district, but in suburbs surrounding the CBD as well.

Secondly, unit rent is now just $10 less than house rent in Sydney overall. This means that many consumers who may have only been looking for unit accommodation before may now realise that it costs essentially the same to rent a house.

For owners of houses for rent in surrounding suburbs, this could result in greater demand.

This trend is likely to continue, as APM stated that unit rents are set to reach parity with house rents in Sydney.