50% rent increase within 5yrs
- Thread starter Big Tone
- Start date
Sounds optimistic in light of recent strong rental growth, but I hope they're right.
In today's Fin, BIS were reported as forecasting 11 % annual rental rises in Sydney for the next three years. So that's along the same lines as Ch 10's story.
Might be time for some rent reviews for my Sydney IP's me thinks
In today's Fin, BIS were reported as forecasting 11 % annual rental rises in Sydney for the next three years. So that's along the same lines as Ch 10's story.
Might be time for some rent reviews for my Sydney IP's me thinks
A very optimistic "expert", probably renting.
Soaring rents deliver rate pain
http://www.thewest.com.au/default.aspx?MenuID=77&ContentID=86656
And that's with the rental returns in Perth already the worst in the country.
Soaring rents deliver rate pain
http://www.thewest.com.au/default.aspx?MenuID=77&ContentID=86656
And that's with the rental returns in Perth already the worst in the country.
and buy up houses as well
Hah! good one.
Has your sense of humour gotten more naughty since you became a real rockstar?
There's an article in this months API that says average rents are currently 23% of average earnings. Therefore, if 30% of average earnings is considered affordable, there should be no problem with rents rising by 30% over the next few years.
PS no source provided for the figures.
PS no source provided for the figures.
http://www.wabusinessnews.com.au/en-story/1/64953/Tax-incentive-for-landlords-
Now I'm sure the rents will go up by at least another 20% over the next few months.
No worries mate, krudd will come to the rescue if he wants to win again.
Yesterday Plibersek launched the NRAS (National Rental Affordability Scheme).
I'm yet to find out all the detail but from my understanding if Developers/Investors produce dwellings that rent for 20% below market value then they will get a one off payment of $8,000 per dwelling.
Comparing this to a 50% increase in rent, I'm not sure I would want the $8,000.
I'm yet to find out all the detail but from my understanding if Developers/Investors produce dwellings that rent for 20% below market value then they will get a one off payment of $8,000 per dwelling.
Comparing this to a 50% increase in rent, I'm not sure I would want the $8,000.
Not to mention you'd lose control of your rental as it becomes part of another govt. welfare scheme. Plus God forbid you'd need to sell mid way through the agreement, it'd be like a defence home - very restricted pool of buyers.
Its for institutions not private investors. And its looking like a big flop. From what I hear none of the institutions are interested. Particularly not in this market.
Of course I could be wrong. But I havent seen any handshaking or ribbon cutting in the media.
BT,
I have an application before council at present for 78 units, when approved I believe the majority of these units will be sold to investors and as such will become rental properties.
The area I am building these dose not have a lot of units and as such the average rental of these units will be below what the average is for the suburb.
Will this project qualify? How dose anyone accurately determine what the average rental is for any suburb?
If it's only for institutions, it sounds like mates rates to me.
I have certainly lost a significant amount of potential profit through the approval stage and any compensation for this would be welcomed instead of me just passing these costs onto the new buyers.
I spend a significant amount of time with other developers, town planners, engineers and other property consultants.
If any of these consultants including myself where asked:
How do we get more rental homes into the market place at a lower cost?
I'm sure the general answer would be: Remove the road blocks local council have put in place and streamline the approval stage.
We are all trying to produce lower cost housing, it sells easier, it's lower risk and easy to build. But when a code assessable application takes 2 years to get approved, with significant design changes and reduction in yields then $8,000 per house looks like chicken fee compared to the loss in profits.
I'm not surprised there has been no ribbon cutting.
I have an application before council at present for 78 units, when approved I believe the majority of these units will be sold to investors and as such will become rental properties.
The area I am building these dose not have a lot of units and as such the average rental of these units will be below what the average is for the suburb.
Will this project qualify? How dose anyone accurately determine what the average rental is for any suburb?
If it's only for institutions, it sounds like mates rates to me.
I have certainly lost a significant amount of potential profit through the approval stage and any compensation for this would be welcomed instead of me just passing these costs onto the new buyers.
I spend a significant amount of time with other developers, town planners, engineers and other property consultants.
If any of these consultants including myself where asked:
How do we get more rental homes into the market place at a lower cost?
I'm sure the general answer would be: Remove the road blocks local council have put in place and streamline the approval stage.
We are all trying to produce lower cost housing, it sells easier, it's lower risk and easy to build. But when a code assessable application takes 2 years to get approved, with significant design changes and reduction in yields then $8,000 per house looks like chicken fee compared to the loss in profits.
I'm not surprised there has been no ribbon cutting.
I see no reason to argue with a 50% rise in overall rents within 5 years.
Weve had a 40% rise in 2 years here in Darwin and theres no 'real' undersupply in the market.
Weve had a 40% rise in 2 years here in Darwin and theres no 'real' undersupply in the market.
Mark
Couldnt agree more with you.
I didnt appreciate the scale of your development - thats more "institutional" size than what most people on here are doing.
Regarding the National Rental Affordability Scheme:
http://www.facsia.gov.au/internet/facsinternet.nsf/housing/nras.htm
Link to prospectus: http://www.facsia.gov.au/internet/facsinternet.nsf/housing/nras_prospectus.htm
You may wish to carefully consider what constitutes "eligible tenants". I dont know what your demographic profile is but I have my doubts as to whether this would be the sort of thing that would suit your needs.
Furthermore, considering all the hoops that have to be jumped through and the restrictions on dealing with the property I dont see that it offers a commensurate financial return. The benefits are:
On 72 units over 10 years thats $5.6 million in tax offsets or payments (I think its probably important to figure out which of those it is....). Its a pretty tight straightjacket for 5 million....
Of course the banks need to be happy about it as well - and they seem to have developed an allergy to subprime housing lately.
Cheers
Couldnt agree more with you.
I didnt appreciate the scale of your development - thats more "institutional" size than what most people on here are doing.
Regarding the National Rental Affordability Scheme:
http://www.facsia.gov.au/internet/facsinternet.nsf/housing/nras.htm
Link to prospectus: http://www.facsia.gov.au/internet/facsinternet.nsf/housing/nras_prospectus.htm
You may wish to carefully consider what constitutes "eligible tenants". I dont know what your demographic profile is but I have my doubts as to whether this would be the sort of thing that would suit your needs.
Furthermore, considering all the hoops that have to be jumped through and the restrictions on dealing with the property I dont see that it offers a commensurate financial return. The benefits are:
On 72 units over 10 years thats $5.6 million in tax offsets or payments (I think its probably important to figure out which of those it is....). Its a pretty tight straightjacket for 5 million....
Of course the banks need to be happy about it as well - and they seem to have developed an allergy to subprime housing lately.
Cheers
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