Property investors and landlords will continue to thrive in 2023 as the rental market continues to be in their favour.
Increased market opportunities and strong rental growth are set to attract more property investors back into the market in 2023, with some declaring it a ‘landlord’s market’ for the foreseeable future.
1. Rising Interest Rates
Removes first-home buyers and their FOMO from buying property, whilst increasing demand for rental properties.
2. Land Supply
New land released to property investors has been declining in recent years, along with severe weather conditions across the country have resulted in wet grounds that slow up the production of new lots and stages.
3. Construction Costs
The combination of uncertainty and increased costs for new dwelling construction have presented challenges to the housing market.
These conditions favour landlords in the existing tight rental property market.
4. Record-Low Vacancy Rate
With the continuous surge in rental demand, the national vacancy rate has reached a record low of around 1%.
Most capital cities even recorded sub-1% vacancy levels. Only Canberra, Melbourne, and Sydney reported vacancy rates that exceeded 1%.
“To put this in perspective, a balanced market is 3%.
5. Migration Growth
Australia is actively looking for more workers from overseas and this would result in increased demand for housing.
Over 200,000 migrants per year are expected, which would put more pressure on rental markets.
6. Boost in Foreign Student Accommodation
Rents in capital cities are expected to rise as a wave of Chinese students arrive in Australia following China’s announcement that it will not recognize degrees earned online through foreign universities.
Approximately 50,000 new Chinese students are expected to arrive in Australia in the next few weeks to attend in-person classes, competing with locals for already in-demand rental properties.
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