The Australian rental market has made a substantial shift since the first interest rate cuts during the GFC in September 2008 - here's what you need to know about what's in store.
Data has revealed the most affected group was Gen Y (18-24 Year olds), who experienced record highs of unemployment, increased reliance on government benefits, and salary growth only marginally over inflation.
The economy began to emerge again in 2009; however evidence concludes that consumers were still wary due to belief that their personal circumstances had declined.
The rental market has substantially changed; yet investors still appear to be driven by the same factors they were pre-GFC.
Surveys show 1 in 3 Gen Ys believe they will never be able to afford to buy, trends show that as early as 2006 they were staying in the family home much later, however it appears since the GFC this has elongated and left a sizeable void in the lower end of the market.
With borrowing restrictions and large deposits now required, staying home later has become the ‘norm’ for Gen Y. The shift has left higher vacancies in the lower end of the market which throughout history has traditionally been the strongest sector, while the middle has emerged as the worthy alternative.
This is clearly evident in recent vacancy rates, which show family homes are experiencing the tightest vacancy rates whilst townhouse and units are experiencing record highs.
A unit may be more affordable than a house, but bear in mind that negative gearing may be an option – if it’s still around (however that’s for another day).
Investors must now more than ever look at the demographics of the area they will potentially purchase in; the probable target market has become imperative. This considerable decline to this sector of the prospective tenant pool may substantially affect their ability to lease their new investment.
Cristel Stenhouse
Throughout her 12 years in real estate, Cristel has demonstrated sheer drive and determination to get the best results.
As a fully licensed estate agent, Cristel has proven herself to be an expert across all facets of Property Management working as a Property Manager, Department Manager as well as vast experience in trust accounting and leasing.
Her efficiency and ability help clients maximise their real estate interests, from suggesting the most appropriate marketing approach, accurately appraising your property to thoroughly screening tenant applications.
As business development manager within our property management team Cristel displays leadership, commitment and a strong work ethic every day which assists her in helping owners meet their expectations.
With Cristel’s expertise and comprehensive understanding of property investment and management, you can rest assured you’re in the most proficient hands.
