RENTS will rise by a further 10 per cent

[ger]

http://www.news.com.au/heraldsun/story/0,21985,23152638-661,00.html


RENTS will rise by a further 10 per cent if the Reserve Bank of Australia lifts interest rates this week, a property investment group has warned.

 

[skater]

Can't say I wouldn't complain if I could raise all my rents by 10%. Can't see that happening across the board though.

 

[imonmyway]

Supply and demand pushes rent prices up, dont get me wrong im happy for rent increases but to blame it on interest rates is absurd.

 

[Witzl]

i gotta agree.... interest rates only play a small part in determining market rental rates.
Silly media peoples.

I also wouldnt mind a 10% rise in rents, but i would sooner take a 10% capital growth

 

[Lacasa]

I will be raising the rent by 10-12% on my IP in Perth in the next couple of months....so the news fits in with my scenario.

Lacasa

 

[DavidMc]

I agree. Supply and demand of the rental market determines price. Interest rates have a small bearing on this, it's not a direct correlation.

 

[grossreal]

hi all
the most interesting part of the article is the replys.
how you work out by increasing costs you reduce price unless you work on the theory that you increase the interest to such a value that nobody can have any form of lending so you go for the german 1000% interest rates and have it on a day to day basis.
and even then it did not bring down the price it did bring down the country and the country then attacked the land owners
very similar to the reasoning in the replys to the article.
I do see rents rising but not because of interest rates
they are only a factor
as rates rise the home owners hit the wall
investors buy the property and tennants move in at new higher rental as they have lists of potential renters.
this does nothing for affordability as the people that just liquidated have to find somewhere to live and they go into a already squeezed rental market.
all you are doing is moving deck chairs on a titanic.
you wont get a rise of 10% because of interest rates but if you run 1% vacancy rates in sydney for 12 months you will auto get 15 to 20% increase of rent due to the fact that there is no were to move to.
increasing rates only increase the rental list
it doesn't increase affordablity nor does it reduce demand (it fuels it if anything)
and it does not get groceries or petrol any cheaper I would very interested in finding out the items in the basket that they work cpi on what does if anything in that basket does come down in the current climate.
I think you will find 0 does.
I don't have an answer for the current problem and its alot more complicated then I can work out but raising rates ain't going to change anything
if anything it will make it a whole lot worse.
I don't see anyone with a true light at the end on the tunnel.
and thats a bigger problem
its like the captain of the titanic saying alls fine just need to speed up and crank up the engine and sail over the iceberg.
the reserve is saying no lets throw the chairs at the iceberg and we will chip it away a bit and the less weight will mean we will sail past it.
were as we need to address the iceberg.

 

[Tim]

I disagree that raising interest rates wont increase rents - sure interest rates are not the single variable for rent rises, but under the current conditions, rents WILL rise because the cost of providing rental accomodation is rising, and the alternatives to renting are less affordable, so people will pay the higher rents.

Otherwise you might as well say that interest rate rises might contribute to rent reductions.........makes absolutely no sense whatsoever

 

[Dazz]

hi all
the most interesting part of the article is the replys.

Agreed grossy.

Poor ol' Kevvy baby from TIC up in Qld is bangin' his drum again.

If you read his blurb in his "investor updates", he has a zealous fervent pathological hatred for the RBA....and has for years.

Trouble is, they don't listen to him....and it annoys the livin' bejesus out of him as he needs to be seen to be a guru with his 10,000 loyal followers all hanging off his every word.

Nice article though to get his organisation quoted in the papers for a bit of exposure. I wonder if it was a true "article" or one of those paid infomercials. It didn't quote to many other sources for comment....also didn't mention the author...just AAP.

 

[Ausprop]

it's ridiculous to be quoting someone with such a vested interest. may as well ask the boss of Ford if he thinks the price of fuel should go up.

 

[geoffw]

Nice article though to get his organisation quoted in the papers for a bit of exposure.

It certainly was. The club apparently manages more than 10,000 properties across Australia.

And here was me thinking that they only sold them. A "little" stretch of the truth perhaps.

 

[Spectre]

Looking back a few weeks ago (? - sorry right now time is a blur) when team rudd went to meet with the rba and they came back looking stiff faced and not happy about things.

Then also interesting how in itself they had to go to to the RBA but the RBA wouldnt come to them... suppose that happened with the previous govt as well but I think there might be a conflict between the two.

 

[Ausprop]

i would suggest that the govt would want any interest rate rises to come on thick and fast so that they can blame anyone or anything but themselves. maybe they wanted .5% and they refused and said only .25%?

this paradox of the oz interest rate vs the rest of the world is fascinating. you would think our currency should be going ballistic??

 

[Trogdor]

If you read his blurb in his "investor updates", he has a zealous fervent pathological hatred for the RBA....and has for years.

Agreed. I had a read of one of these newsletters - the economic analysis was an absolute joke, and the newsletter itself rubbish.

Shame on the journalist for quoting such crap as a reputable source.

 

[VYBerlinaV8]

i would suggest that the govt would want any interest rate rises to come on thick and fast so that they can blame anyone or anything but themselves. maybe they wanted .5% and they refused and said only .25%?

this paradox of the oz interest rate vs the rest of the world is fascinating. you would think our currency should be going ballistic??

Good point. Does this mean our currency is undervalued at the moment?

 

[ice]

I will be raising the rent by 10-12% on my IP in Perth in the next couple of months....so the news fits in with my scenario.

Lacasa

I've got one that will be raised by 20% soon.

 

[Michael Yardney]

Rents will increase but not for the reason KY suggests.

The factors leading to rental increases will be the following consequences of the interest rate hike:

1. Lower affordability means more first home buyers will have difficulty getting into the housing market and therefore there will be more tenants

2. Some investors will hold back buying properties - (fear and affodability issues) means less investment stock.

3. Builders and developers are not commencing new developments. They are holding back in this uncertain climate and also due to higher interest rates. This means less stock for both owner-occupiers and investors. Already there is a housing stock deficiency in most capital cities.

4. Tenants won't move as frequently – it will be too hard for them (few properties to rent)

5. Vacancy rates will fall further creating more competition amongst a bigger pool of tenants

Our research suggests that rents for many properties, and particularly apartments) in the inner suburbs of Melbourne, Sydney and Brisbane will increase by at least 10% over the next year.