Two key statistics from a recent CoreLogic report show why now could be a great time to be a property investor.
First, the national vacancy rate (which is the share of untenanted rental properties) fell to just 1.2%, which is the lowest in recorded history.
Second, the median weekly rent for an Australian rental property increased to $526, which is a record-high.
In other words, the typical property investor has never found it easier to attract tenants and has never earned more rental income.
Those two statistics are closely linked, because when supply (i.e. the vacancy rate) falls, demand (i.e. the rental price) tends to rise.
Canberra remains Australia’s most expensive metro rental market
The vacancy rate for Australia’s pool of rental properties fell from 2.2% to 1.2% between the June quarters of 2021 and 2022. Meanwhile, the median weekly rent for those properties increased 9.5%, although rental growth varied widely from city to city:
- Canberra = up 9.3% to a median weekly rent of $690
- Sydney = up 9.7% to $643
- Darwin = up 3.5% to $565
- Hobart = up 8.6% to $549
- Brisbane = up 12.1% to $547
- Perth = up 6.7% to $515
- Adelaide = up 10.6% to $492
- Melbourne = up 7.5% to $480
While national rents grew by an enormous 9.5%, national property prices grew by an even larger 14.0%.
When the value of a rental property grows faster than the rental income it delivers, that leads to a fall in the property’s gross yield (which is the annual rental income expressed as a percentage of the property’s value). As a result, the national yield fell from 3.41% to 3.33%.
If you want to buy an investment property, I can help you with the finance. Get in touch to discuss the next steps.