RENTAL MARKET WRAP
Property investment is a long game and Domain’s latest Quarterly Rental Report shows just that.
While rental prices in our local area are 3% lower on average year-on-year, they are still approximately 20% higher than they were five years ago.
It is safe to say that we are seeing the cyclical nature of the market at play.
Although some investors may be enticed by the no-risk return of 4-5% interest-earning savings accounts (courtesy of the RBA’s cash rate hikes), by comparison, local rental yields – even in this market – are still sitting at 3.5% for houses and 5.2% for units.
This is proof that property investment and capital accumulation is still the best way to secure long-term wealth.
Additionally, Domain notes that overall property values are on-track for a full recovery, which could come as early as the end of 2023 in some parts of the country. Further to this, Corelogic suggests that in 2024–25 property values will go from strength to strength, pushed up largely due to the national housing supply shortage.
This paints a picture that those who can invest now - despite a tough economic landscape of sticky inflation and a possible further cash rate rise next week - will see rewards in the long run.
Locally, the outlier suburbs that experienced year-on-year rental price growth were Ainslie (+2.4%), Bruce (+7.1%), Crace (+12.8%), Hughes (+8.5%), Nicholls (+4.9%), Taylor (+0.7%) and Yarralumla (+11.1%).
Canberra remains the second most expensive capital city in which to rent, at $649 per week on average, behind Sydney which leads the nation at $726 per week on average, according to Corelogic.
In comparison to the national lens, average rental prices on realestate.com.au in Queanbeyan are currently sitting at $600 per week, and Batemans Bay at $480 per week.
The ACT Government has also announced new stamp duty exemptions for dual occupancy dwellings built on residential zone 1 (RZ1) blocks over 800m2 between 27 November 2023 to 30 June 2026.
This will allow for a second unit-titled dwelling of up to 120m2 in size and $800,000 in price, to be built and sold with a stamp duty exemption applying to the first transfer of title.
This is part of the Territory Plan to encourage development and incentivise density in suburban areas to address housing shortages now and into the future. This presents an opportunity for investors and developers.
We are here to help. Please reach out to your Property Manager to discuss your current investment property, or portfolio. Like you, we are in this for the long-term.
For any further information or queries please contact your Blackshaw Property Manager.