According to the latest figures from Domain, tenant rent in some regional areas of New South Wales has increased by up to 30% over the past couple of years. This rise has also coincided with a property price boom driven by a significant increase in regional migration levels over the same period.
What’s driving the regional rent rise?
A range of factors have contributed, including:
- booming tenant demand.
- limited rental property supply (low vacancy rates).
- an influx of tenants from capital cities who have higher incomes.
- landlords looking to offset recent interest rate rises.
- higher building costs, resulting in few properties being built.
Domain’s head of research Nicola Powell summed up the impact.
“The supply of rental properties, but also the new supply pipeline of housing, hasn’t been able to keep pace with the change in demand. Generally, when vacancy rates go below 2%, it’s a landlord’s market, at around 3% it’s balanced and above 3% it favours tenants. What we’ve got right now is a landlord’s market across every single capital city in Australia,” she said.
KPMG demographer and economist Terry Ransley agrees.
“There is simply no available house, it’s not just housing affordability, it’s a housing availability issue.”
Property managers are reporting that any available rental properties are being snapped up almost as soon as they hit the market. This puts landlords in a strong bargaining position.
The implications for regional investment property buyers
If you currently own a regional investment property, you will have achieved significant capital growth over the past couple of years. You will also have had the opportunity to increase your rental income to cater for the changed market conditions.
If you’re looking to buy a regional investment property, it means you can be confident that you will have strong tenant income to help you with your loan repayments. When you factor in tenant rental income, buying an investment property might be more affordable than you think. You can get an indication of your potential borrowing power and loan repayments by using our range of calculators.
According to the latest figures, 2.2 million Australians are landlords, and that number has grown steadily over the years.
How we can help
If you’re looking to join the growing number of Australians buying an investment property in Newcastle, Maitland or Lake Macquarie, talk to us. Our licensed and experienced brokers at Wisebuy Investment Group can help you to find the right loan.
We’ll take the time to find out your individual needs before matching you with a suitable lender. We work with more than 60 lenders in the Australian market, and we can help you with your loan application. Importantly, we work for property buyers, not lenders.
Contact us today for an obligation-free chat to find out more. We’d be happy to answer any questions you have and to explore your finance options with you.