Rents tumble in inner Sydney

definitely not tumbling in WA. I anticipate a further 20% rise in rents in the near term

Not tumbling anywhere, even in the places mentioned in the story with rents in the $1000/week range that $20 off would hardly qualify as tumbling. But it did put some life in a story about nothing and gave some (false) hope to renters and something to cheer about, which was nice seeing how its X-mas and all that. :D

When compared to house prices rents are already too low so if the reserve starts printing money then you better add another 0 behind that 20% rent rise.
http://business.theage.com.au/business/central-banks-go-nuclear-20081206-6swd.html
 
Its sure is, just promise you'll let us know if your landlord gives you a $20 tumble in your rent. :D

well, if nothing else it means my landlord won't be able to raise rents. in the ACT landlords are not allowed to raise rent by more than 1.2X the change in housing CPI (I think that is the figure, act tenants union has a detailed explanation somewhere). So if rents only go up 1% as a whole, my landlord can only raise rent 1.2% or demonstrate reasonable cause as to why a larger increase is in order (i.e., substantial improvements to the property, etc.). i doubt that this could be used to force landlords to lower rent, but it would prevent rises (providing tenants know their rights, that is).

but in any case, if market rents are going down and someone's landlord keeps raising rent above market rates, all they have to do is pack up and move. pretty simple, really. not something i would particularly enjoy doing but neither would it be the end of the world.

but my rent isn't up for review until next august (can only do it 1x/year here) and by then i hope housing prices will have come down enough to buy something i can live with....
 
but in any case, if market rents are going down and someone's landlord keeps raising rent above market rates, all they have to do is pack up and move. pretty simple, really.

ummmmm - move to where exactly? at under 2% vacancy rate across the entire inner/mid ring district (not just suburb) where my ip's are, i don't think any of them would fancy taking their chances against the other 20 couples applying (not that i am currently putting up the rent as only just had an increase 3 months ago).
 
ummmmm - move to where exactly?
somewhere cheaper?

I am not in any way trying to say that all places are affected equally. but if you do raise rent above what the market will bear people will leave--stands to reason. that's all i'm saying. if you are in a popular district with people clamouring to get in obviously the situation is different.
 
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I don't think that there is any contradiction here. People want sell at prices buyers aren't willing to pay. hence the low volume. after a while they give up and rent the houses out, resulting in a looser rental market.

If these are OO trying to sell where do you think they end up living if they turn these homes into IP's? If they where originally IP's then they continue as IP's.

its just a balancing out, i guess. but one that benefits the renter more than the owner i suppose.

How's that? :confused: I don't quite see how it benefits renters as the same no. of people need housing and the no. of houses remains the same.

purely anecdotal, i know, but i have seen a number of for sale listings turn into for rent listings in canberra. of course the rental market here is so tight that it hasnt made an appreciable difference, but if you look at sqmresearch data, the number of rental listings has (relatively speaking) spiked dramatically since sept/oct. Seems to me people are deciding to rent rather than try to sell in this market..

Read above comments.

it makes sense and, since i still rent, it is good for me...

If it makes sense to you then keep renting. You renting is good for me too.

as far as what happens when the economy turns around, i am happy to cross that bridge when we get to it. i think we have a long way to go before we get to that point.

As long as it's what you feel comfortable with. Just keep in mind the ecomony has a history of ups and downs. Nothing new here ;)
 
well, if nothing else it means my landlord won't be able to raise rents. in the ACT landlords are not allowed to raise rent by more than 1.2X the change in housing CPI (I think that is the figure, act tenants union has a detailed explanation somewhere). So if rents only go up 1% as a whole, my landlord can only raise rent 1.2% or demonstrate reasonable cause as to why a larger increase is in order (i.e., substantial improvements to the property, etc.). i doubt that this could be used to force landlords to lower rent, but it would prevent rises (providing tenants know their rights, that is).
So the only way for your landlord to put up rent above that 1.2% is to throw you out and look for a new tenant ? That's rough.

but my rent isn't up for review until next august (can only do it 1x/year here) and by then i hope housing prices will have come down enough to buy something i can live with....
You mean more then they already have ? :confused: Good luck.
You know the rates have been coming down for the past 3 months and since spending has not improved much the rates will continue to come down. Property prices have probably stopped falling if not by November then this month for sure but as usual it will only show up in the stats a few months after the event. Now there is talk of the central banks greasing the printing presses and getting ready to put them to work.
http://business.theage.com.au/business/central-banks-go-nuclear-20081206-6swd.html
If that happens you'll see a lot more of this " a number of for sale listings turn into for rent listings in canberra." only at double or triple the current rent, depending on the amount they print. Anyone with savings and on a fix income will be screwed while the big winners will be the ones who borrowed to the hilt. As a bonus they will keep the myth about property prices going up every 7 years alive. :D
 
So the only way for your landlord to put up rent above that 1.2% is to throw you out and look for a new tenant ? That's rough.

Well, i am already paying market rent. If he wants to raise rates more than 1.2X increased CPI then he can, of course, throw me out. And then he can advertise for significantly more than what the current market is and have an empty place for a month or so, pay for advertising, etc., etc. and risk getting a much worse tenant than I am (I am pretty much the ideal tenant, btw. property is in better condition than when I moved in). Sure he can do that, its his property, i don't have a problem with it though I do think it would be a foolish thing to do.

Property prices have probably stopped falling if not by November then this month for sure but as usual it will only show up in the stats a few months after the event.

We will have to agree to disagree. :) No point in getting into that irresolvable argument. I have never seen it develop beyond a "yuh huh" "nuh uh" type of discussion. que sera sera.

you'll see a lot more of this " a number of for sale listings turn into for rent listings in canberra." only at double or triple the current rent, depending on the amount they print. Anyone with savings and on a fix income will be screwed while the big winners will be the ones who borrowed to the hilt. As a bonus they will keep the myth about property prices going up every 7 years alive. :D

Well if that happens it happens. It isn't going to happen overnight and I suspect that whatever new trend emerges will emerge gradually. When I'm ready to buy I will buy, until then I will rent. I don't understand why this bothers people...

@Weg
If these are OO trying to sell where do you think they end up living if they turn these homes into IP's? If they where originally IP's then they continue as IP's.

Good point. but canberra has, as I understand it (i could very well be wrong) a very mobile population compared to other cities. A lot of people moving in from and out to different states as well as a lot of people from overseas. However this is just an impression formed on the basis of the nature of the government work (a lot of people seem to get moved around a lot) and on various articles, etc. I have read.

SQM research shows a big pop in the number of listings in canberra over the past few months, though vacancy rates remain quite low. will that change? dunno. more listings would seem to imply that things are moving in that direction.

@ lizzie
ummmmm - move to where exactly? at under 2% vacancy rate across the entire inner/mid ring district (not just suburb) where my ip's are, i don't think any of them would fancy taking their chances against the other 20 couples applying (not that i am currently putting up the rent as only just had an increase 3 months ago)

Please see my previous post where i say:
if you are in a popular district with people clamouring to get in obviously the situation is different.

it looks like its "beat up urchin day" today :p that's ok. i think my positions are pretty mild and reasonable, though, so please react to what i write not what you think "doom and gloomers" stand for. I am not against PI, I am not against people getting wealthy through investment. I am just interested in what is going on today in the general vicinity where i live. i am not saying that everyplace in all of australia is going into massive freefall.
 
it looks like its "beat up urchin day" today :p that's ok.

only cause today you're making lots of sweeping statements that don't ring true in many areas - but that you're insisting they're correct but not backing them up with any data when requested.

perhaps needs to be specific to your backyard (and say that) or provide some relevent data that - er - vanuatu is sinking. :D

time for a second glass of red. red is good for you, full of antioxidants ... (hmmmmm - where did i put that scientific study).
 
Anecdotally I'm not hearing about rents dropping in the inner sydney area we're looking at.

Interesting to see the article mentioned increased rents in Concord / Rhodes . That might have something to do with all the new upper market units that are being built there at the moment , moving the demographics of the area. I also wouldn't classify those areas as outer suburban .
When you see a basic mistake in an article like that , it sort of undermines the credibility of the whole argumeent.

Cliff
 
only cause today you're making lots of sweeping statements that don't ring true in many areas - but that you're insisting they're correct but not backing them up with any data when requested.

perhaps needs to be specific to your backyard (and say that) or provide some relevent data that - er - vanuatu is sinking. :D

time for a second glass of red. red is good for you, full of antioxidants ... (hmmmmm - where did i put that scientific study).

Oh I think I qualified my statements, people just choose to interpret them as sweeping. I did not say anywhere that rents were going to collapse throughout the country. And I did provide links regarding vanuatu. Still it is my fault for trying to present a contrarian viewpoint on a forum that is comprised primarily of people with vested interests in the opposite viewpoint, foolish of me to expect a generous audience. having said that, i did not think that, when i posted on vanuatu, that i would be asked to prove global warming.... a bit of a tall order.

meanwhile its perfectly ok for people on the other side to make sweeping statements to their heart's content...

but yeah, the message is coming through loud and clear. no worries. bye bye
 
a forum that is comprised primarily of people with vested interests in the opposite viewpoint,

hmmm...people with vested interests, that funny urchin. I suppose you don't have any vested interest, right ? :D
but my rent isn't up for review until next august (can only do it 1x/year here) and by then i hope housing prices will have come down enough to buy something i can live with....

lol
it looks like its "beat up urchin day" today :p that's ok.
Isn't that what you do on the rentersRus site only a lot worst, don't tell me you can't handle a bit of your own medicine. :D

I suspect that whatever new trend emerges will emerge gradually. When I'm ready to buy I will buy, until then I will rent. I don't understand why this bothers people...
You must be getting confused and thinking of the other forum, this is Somersoft Property Investors Forum where we are in the business of renting properties so people are HAPPY for you to rent. Specially if as you say you are a good tenant and rent from them. :D
 
I saw that article on the weekend. I thought to myself: 'I bet this one ends up on Somersoft in minutes.'

This bit amused me:

The median rent on a one-bedroom apartment in Kirribilli and Milsons Point fell 15.9 per cent in the three months to the end of September, official figures from NSW Housing show.

I wonder how many one bedroom rentals in that tiny area actually turned over in that 3 month period to arrive at that 15.0% figure?

Anyway, my tenant in Annandale (Sydney, inner west) is getting a $50 rent increase in January 09 (which he knows about) on top of the $50 rent increase in January 08 and he's happy.

And of course let's all admit that if that article said that rentals in that tiny area had risen by 15.9% in 3 months, anybody with an IP within cooee would get excited and boast about it.

Scott


Scott
 
Hey Urchin - which suburb in Canberra are you in? How much was your rent increased by last year? I invest in Canberra, so just curious. Cheers.
 
Renters were also taking a more cautious approach to budgeting. "In the middle and upper end of the rental market it is very discretionary, and in these uncertain economic times, if they can, they choose a $500-a-week rental property as opposed to an $800 to $1000 one."

Hahahaha - do you realise this actually *increases* the demand (and therefore price) for lower to median priced rentals?

Yay rents go up again!
 
Originally Posted by sphinx
Renters were also taking a more cautious approach to budgeting. "In the middle and upper end of the rental market it is very discretionary, and in these uncertain economic times, if they can, they choose a $500-a-week rental property as opposed to an $800 to $1000 one."
Hahahaha - do you realise this actually *increases* the demand (and therefore price) for lower to median priced rentals?

Yay rents go up again!

Are you serious? Do you think all the landlords of the expensive empty rentals will be happy to keep their properties empty? No, they'll drop their rents (as they are doing) to get tenants, increasing competition at the midrange level. Now landlords of the "$500" places are competiting for renter attention with better quality places in the same price bracket. So unless there's an abundant supply of potential tenants then the "old" $500/week landlords get to make the decision on whether to keep the place empty at that price, or drop their rate to remain competitive.

Supply & demand my man.
 
DadOfSam,

Close, but not quite...

There is actually no net change in the number of people renting versus the number of properties for rent. All that has changed is that a portion of the people renting the top end stuff now don't want to pay that much and this causes the top end rents to ease.

That, however, has absolutely no "flow on" effect. The people paying mid price point rents might be able to get a nicer house now for that price, but it just means a net increase in houses at that price point coupled with a matching net increase in tennants at that price point. If those already on the cheaper price point "trade up" then that's matched by a "trade down" from the over-stretched merchant bankers in Mosman and PottsPoint. :D

i.e. All that happens is the top end comes back to the pack a bit. Your exponential demand curve becomes more of a straight line... ;)

Cheers,
Michael
 
when people ask for more rent, have some tenants said "interest rates have fallen, why are you putting up the rent?"


Nope - but as a tennant i did use the lowered interest rate as a reason to ask for air conditioning.
However i coupled that with mentioning it would add value to the property, and that it can be depreciated over 4 years if added to his depreciation schedule.

.... oh, and i offered $10/wk extra rent.

Arent i a model tennant? :D
 
DadOfSam,

Close, but not quite...

There is actually no net change in the number of people renting versus the number of properties for rent. All that has changed is that a portion of the people renting the top end stuff now don't want to pay that much and this causes the top end rents to ease.

That, however, has absolutely no "flow on" effect. The people paying mid price point rents might be able to get a nicer house now for that price, but it just means a net increase in houses at that price point coupled with a matching net increase in tennants at that price point. If those already on the cheaper price point "trade up" then that's matched by a "trade down" from the over-stretched merchant bankers in Mosman and PottsPoint. :D

i.e. All that happens is the top end comes back to the pack a bit. Your exponential demand curve becomes more of a straight line... ;)

Cheers,
Michael
Assuming there's an abundant supply of would be tenants. Like I said if there isn't strong renter demand and rental places are on the market for a few weeks because there's more supply than demand, then the better quality places at $500/week go first, leaving the "old" $500/week places empty for longer and giving the landlords the potential headache of holding out at $500/week or dropping the rent. Whereas before the "old" %00/week guys had an equal chance of getting a new tenant, noiw they're at a disadvantage. See how that works? The caveat I included made a difference - please read what I post properly, before responding. That's twice today mate.;)
 
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