While Vendors May Be Unhappy, Landlords Still Have Very Big Reasons To Smile-www.k8k8.com

Business After all, demand from prospective buyers is still weak despite the Reserve Bank delivering an interest rate reduction on Melbourne Cup Day. And, on the supply side, financiers are preventing developers from building – and investors from buying – stock, in particular, apartments that could oversupply the market. Agents, too, are unhappy, as clearance rates continue to circle cyclical lows. After factoring in Sunday’s auction results, the Real Estate Institute of Victoria this week revised its auction clearance rate to 52 per cent. Last weekend it downgraded its estimated clearance rate to 50 per cent, the lowest in seven years. This weekend last year, Melbourne’s auction clearance rate was 65 per cent. But while vendors may be unhappy, landlords – and property investors who can afford it – still have very big reasons to smile. This is because a renter generation is emerging, and looking likely to settle in for a while. ”We are finding most tenants are staying in the same rental property for an average of four years,” says Lou Rendina, director of Rendina Real Estate, which services Melbourne’s northern and western suburbs. ”This compares with 10 years ago, when we would have a rental turnover every 12 to 18 months.” Mr Rendina said the recent economic slowdown affecting property and the wider market was not noticeable within property management departments. ”Rents are still increasing and rent reviews are looked at every six months,” he said. ”Rental properties are in high demand and supply is low.” The REIV agrees, claiming that vacancy in metropolitan Melbourne is very low – below 3 per cent – and has been that low for a while. A vacancy rate below 3 per cent is impressive compared with commercial office markets in the CBD, city fringe and suburbs, where by and large vacancy rates are twice that level, or more. ”A combination of growing population and little growth in construction lead to rapidly increasing prices and rents,” REIV spokesman Robert Larocca said. ”Over the medium term – the past five years – the pressures in the rental market have matched those in the owner-occupier market.” So, what does this all mean for buyers? An opportune return, basically, according to buyers advocate David McRae. ”But it’s not the time to buy rubbish,” he said. Mr McRae said market yields – the immediate rental return an investor derives from their asset, presented as a percentage of what they paid – had increased in Melbourne in the second half of this year. He said that four months ago a property returning $360 a week would have sold for about $500,000, reflecting a yield of 3.75 per cent. ”Still renting at $360 per week, yields have now increased to about 4 per cent, meaning investors can pick up the same kind of property for about $468.000. ”This represents a reduction in value of $32,000, which we feel is now the bottom of the market. The peak of that market was April 2010.” Catherine Cashmore of Elite Buyer Advocates says many renters who had the intention of buying their own home did so in the 2009 downturn. She expects rents for liveable areas – those close to transport and jobs – are unlikely to fall any time soon, given the lack of supply compared to demand. Early Settlement is a specialized financial support company for real estate businesses. For More information on Advance Commission, Real Estate Commission Sydney or Non-Bank Factoring visit us @ ..earlysettlement…au/ Source: Marc Pallisco November 14, 2011 smh.domain…au About the Author: 相关的主题文章: