News: Rental demand booming down under

Vacancy rates across Australia are at all-time lows, according to the Real Estate Institute Australia (REIA)/Mortgage Choice Real Estate Market Facts March quarter 2006 edition released recently.

With rents going up in response to strong demand for rental properties, the opportunities for improved residential property investment yields should catch the attention of property investors.

The very low 1.4% vacancy rate in Perth has led to rapidly rising rents.  At the same time, house prices are soaring in Western Australia (WA), as a result of the boom in minerals prices and infrastructure developments.

‘Growth is likely to continue in the WA housing market as long as export dollars flood into the market, creating employment opportunities, stimulating net migration, and increasing consumer demand' said REIA President Tony Brasier. 'People are caught up in the spirit of buying, and demand is outpacing supply’.

Melbourne, Hobart, Brisbane and Canberra all recorded moderate increases in median house prices over the year to March 2006, while prices remained flat in Adelaide and declined in Sydney.

During the March quarter 2006, vacancy rates were tight in every city, at 1.5% in Brisbane, 1.7% in Adelaide, 1.8% in Melbourne and Canberra, 2.0% in Sydney, 2.2% in Hobart and 3.3% in Darwin. 

‘Median weekly rents have been steadily increasing in all capital cities in response to the increased demand for rental accommodation,’ said Mr Brasier.

‘Increasing rents are expected to continue into the coming months, and will act as an incentive for investors considering a property purchase,' he added.  'While the quick profits of 2003 and 2004 are no longer available in the eastern states, long term investors have the opportunity to buy at reduced prices and take advantage of low vacancy rates and increasing rents.’

Fast Facts - March quarter 2006

  • Quarterly Australian weighted average median house price $394,431

  • Median house prices up:
    Perth         5.1% to $353,000
    Hobart     2.2% to $282,500
    Darwin     2.1% to $335,000
    Canberra     1.9% to $375,000
    Brisbane     0.5% to $324,000

  • Median house prices down: 
    Melbourne     -3.1% to $359,500
    Sydney     -1.0% to $516,000
    Adelaide     -0.4% to $277,000

  • Median other dwelling prices up:
    Hobart     18.9% to $220,000
    Darwin     7.4 % to $260,000
    Canberra     4.2% to $301,000
    Perth         3.8% to $275,000
    Melbourne     0.8% to $307,500
    Adelaide     0.6% to $215,000

  • Median other dwelling prices down:
    Sydney    -1.4% to $358,000
    Brisbane     -1.4% to $265,500

  • Vacancy rates:
    Perth         1.4% 
    Brisbane     1.5%
    Adelaide     1.7%
    Melbourne     1.8%
    Canberra     1.8%
    Sydney     2.0%
    Hobart     2.2%
    Darwin     3.3%

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