Owners of rental properties around Australia have enjoyed a strong revival as rates skyrocketed over the past 12 months, a new report has revealed.
Residex said in its latest advisory that most property investors around Australia are now getting an extra $70 per week or $280 per month in rent. This means an average Aussie household is now handing out an extra 6% of their gross income to their landlords.
Rental rates grew the fastest in Perth, jumping by a whopping 31.9% over the past 12 months ending July 2007. Brisbane properties enjoyed a 20% rise while Melbourne rose by 14.2%. The tightening rental market in Sydney has pushed rates up by 18.9%.
"The issue for renters is that no proposal put forward as yet will solve the rental increase and the problem is only going to get worse as demand is higher than supply," wrote John Edwards, CEO of Residex. "We expect rents across Australia to increase by at least a further $50 per week."
Despite the sharp rental rises, Edwards said this increase would still not provide an investor with a return, which was acceptable. "A $50 per week increase would only provide an investor in a typical Melbourne unit with a return of 5.5%," said Edwards.