Rents drop in real terms

hobo-jo said:
I guess you and I have a different opinion on what the word 'national' means.
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east coast, yes? :p

I think it looks like a difference in data between SQM and RP ....like that's never happened before? :cool:

Either way, I and others in Syd have been putting rents up consistently, with no issues.
 
Tales from the ground

Interestingly, I was doing this exact analysis just recently across my IP's. And for the past three years 2007-2010, the rent increases have had a compound growth of between 2.9% to 5.5%.

The increase in rents have been pretty consistent over those three years. The properties are all in Melbourne and one in Upper Commera (Qld). I admit Upper Coomera may have rents stagnant in 2011, but we'll see how we go.

As background, current strong household savings ratio, strong employment growth and solid wages growth are nice countervailing forces imo, to some of the D&G sentiment and underpins future rental growth as I see it in how they will affect my properties.
 
buzzlightyear said:
Interestingly, I was doing this exact analysis just recently across my IP's. And for the past three years 2007-2010, the rent increases have had a compound growth of between 2.9% to 5.5%.

The increase in rents have been pretty consistent over those three years. The properties are all in Melbourne and one in Upper Commera (Qld). I admit Upper Coomera may have rents stagnant in 2011, but we'll see how we go.

As background, current strong household savings ratio, strong employment growth and solid wages growth are nice countervailing forces imo, to some of the D&G sentiment and underpins future rental growth as I see it in how they will affect my properties.
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The thing is, giving your own isolated exceptions is pretty pointless. It is important to have accurate information about what is happening, and that information should not be shied away from or buried.

Policy and attitudes are determined by such information. There seems to be an unwillingness to cope with, or deal with information that is considered negative or "loserish" to coin a word, as though somehow by embracing it, it might be contagious.
 
MrCrumbpacker said:
The thing is, giving your own isolated exceptions is pretty pointless. It is important to have accurate information about what is happening, and that information should not be shied away from or buried.

Policy and attitudes are determined by such information. There seems to be an unwillingness to cope with, or deal with information that is considered negative or "loserish" to coin a word, as though somehow by embracing it, it might be contagious.
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Respectfully disgaree. It is median data that is constantly referenced by bulls or bears. In the end, real life results are generally scarce on the ground. I invest in real property and the results show exactly what is possible for those with the time and motivation. I don't invest in a property that tracks movements in median prcies or rents because that property doesn't exist, only bricks and mortar and a mortgage.

Your insuation that my commentaryignores bad data is a stretch. SS has countless graphs, stats and other references to data, good and bad. I simply wanted to juxtapose real results against a median figure. For reasons I appreciate, actual results are under represented here.

Maybe my experience is contrary to your outlook, belief of recent market performance, expectations of future market performnace or even wish about the market. I also don't believe the results are extraordinary. Its simply another piece of information that forms part of the total picture. I make no judgement about the data referenced here

Its not dissimilar in saying or making commentary to share investors that their performance can simply be tracked by the movements in S&P200 or All Ords. I suspect those invested in Gold, silver and companies in those industries, wouldn't really give a hoot about the daily, monthly or quarterly movements of XJO and XAO.
 
buzzlightyear said:
Its simply another piece of information that forms part of the total picture. I make no judgement about the data referenced here

Its not dissimilar in saying or making commentary to share investors that their performance can simply be tracked by the movements in S&P200 or All Ords. I suspect those invested in Gold, silver and companies in those industries, wouldn't really give a hoot about the daily, monthly or quarterly movements of XJO and XAO.
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The reason information is collated is to try to give a picture of what is happening to the market in general.

To use your analogy, the stock market may be taking a dive, but must be OK because the stock that I own are doing OK.

I know of friends of mine that are in serious trouble with their properties at the moment, and are about to be foreclosed by the banks. They seem to be unable to realise their predicament, and in my view, have not been helped by the overly optimistic input by media and the EA's they are dealing with.

Much as we all like to "talk our book", and generally talk the market up, there is afoot some serious data, which needs to be taken seriously.

Forewarned is forearmed.
 
What is important, I think, is knowing the difference between what you are getting for rent, what the rest of the comparable market is getting, and the direction this is trending.

For many investors, stagnating rent is not that important. Once properties are positive cashflow the time pressure of tipping in cash from other sources is removed. This doesn't mean you are necessarily getting the best, or even desirable, return on your investment, but it does mean that you should be able to comfortably hold on until market conditions improve.

If you are negative cashflow, though, and rents are dropping (especially in nominal terms), you may well need to think about activating one or more of your risk management strategies.
 
VYBerlinaV8 said:
What is important, I think, is knowing the difference between what you are getting for rent, what the rest of the comparable market is getting, and the direction this is trending.

For many investors, stagnating rent is not that important. Once properties are positive cashflow the time pressure of tipping in cash from other sources is removed. This doesn't mean you are necessarily getting the best, or even desirable, return on your investment, but it does mean that you should be able to comfortably hold on until market conditions improve.

If you are negative cashflow, though, and rents are dropping (especially in nominal terms), you may well need to think about activating one or more of your risk management strategies.
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Very true, thankfully rents are trending upwards (and fairly consistently and rapidly) in the only markets I am interested in...
 
hobo-jo said:
Good find listoffallacies. Rents saw little growth in 2009 as well.

The real squeeze (over the last 12 months) has been on investors and owners who have a variable rate mortgage!

http://www.bullionbaron.com/2011/04/real-estate-propagana-machine.html
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Yeah little rent growth for me since 2009 as well lol

Property 1.) Purchased 2008, 9% Per annum compounding rental growth and 4.5% P.A compounding capital growth... total return looking pretty good their. this is over a 3 yr period (note i was owner occupy during 2008)

Property 2.) Purchased 2009

8% P.A Rental Growth, 6% P.A Cap Growth (2yr period compounding)

Property 3.) Purchased Late 09

5% rental growth + 5% CG (1.5yr period)

So i've had rents increase

30%
17%
11%

So yeah pretty little growth their :p
 
Propertunity said:
Either way, I and others in Syd have been putting rents up consistently, with no issues.
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Ridin-High said:
So i've had rents increase

30%
17%
11%

So yeah pretty little growth their :p
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Likewise all my Sydney IP's have been having consistent increases and have increased around 20%pa for the last few years with no signs of it stopping yet. I have one in Vic that has also had increases, only not as many and not as high a percentage, but increasing nevertheless.



InnerWestie said:
Thanks for letting me know guys, rents across my several Sydney properties have increased 15% on average in 2 years...I might re-imburse the tenants because I think I may have charged them incorrectly.
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LOL! Yeah, it looks like a few of us Sydney Landlords have been overcharging our tenants. :rolleyes:
 
hobo-jo said:
Rents saw little growth in 2009 as well.
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I just love blanket statements like that. :rolleyes:

How many times must it be said, what is happening in one part of the country is not what is necessarily happening in other parts.

Australia is not just ONE marketplace.
 
MrCrumbpacker said:
The thing is, giving your own isolated exceptions is pretty pointless. It is important to have accurate information about what is happening, and that information should not be shied away from or buried.
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....much the same as in broad, general brush strokes should be avoided also? or not?

i think isolated experience is a much better indicato rand shows true understanding of a particular suburb/region/state 's market.
 
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