But they just don’t get it! I s’pose they just never noticed the inverse corelation between rents and prices.
http://finance.news.com.au/common/story_page/0,4057,9890691%255E462,00.html
Yep,
In booming markets, rents tend to grow less quickly, even stagnate, or go backwards slightly.
In flat/down markets rents tend to grow more quickly.
I have long term charts that illustrate this. As property prices oscillate about the long term value trend line, rent oscillates with an opposing cycle.
It won’t be necessary to bring my charts to Melbourne/Sydney, I believe you.
But these cycles take a bit longer than a few months to play out, as you know. Give it a bit more time. The property market hasn’t corrected anywhere near what it will…either by crash or by an extended plateau, who knows. Property prices are still at boom levels even if they have come off a little bit.
We have nowhere near entered the property doldrum phase where we will see rents starting to creep up as supply starts to dwindle.
But you have highlighted an important point. The inverse corelation is not precise, there may be some degree of lag.
Cheers
Hi all,
Couldn’t we call this the law of supply and demand – as the price of money (interest rates) change up and down then the number of renters and/or buyers changes in accordance with the movements in the money market.
Interesting to read in this mornings Australian – Sydney and Brisbane rents have risen over the past 12 months (evidenced by bond lodgement records) and in Brisbane’s case increased by up to $20/week depending upon nature of property.
Melbourne reports suggest that apart from apartments there is a general upward trend in rent figures.
This is assisted by a reduction of almost 0.5% in the Sydney and Melbourne vacancy rates (Perth too) and Brisbane has experienced a 6% increase in the number of tenants over the last 12 months.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by The Mortgage Adviser:By bringing the charts, I meant you might be able to bring us some luck and get some increasing rents.
Oh well, here’s hoping.
The Mortgage Adviser
[email protected]
Ph: 0414 347 771Comments made are of a general nature and should not be construed as advice to any particular individual.
I didn’t realise that’s what you meant Rob, I’ll send them immediatley! LOL
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