Thursday, January 25, 2018

Rents on the rise


According to the latest CoreLogic Quarterly Rental Review, the December 2017 quarter saw all capital cities, excluding Canberra, achieve a stronger annual change in rents compared to the same period in 2016.

At the end of 2017, weekly rents were recorded at $421 nationally, with figures of $455 across the combined capital cities and $350 across the combined regional markets.

Looking locally, Adelaide's change in rent is up 0.5% over the last month, up 0.9% over the last quarter and up 3.1% over the last year, holding 
a median rental income of $368. 

So what does this mean for landlords and tenants?

Landlords

It's a great time to be a landlord in our state. Adelaide remains the most consistent and reliable rental market in Australia and purchasing property is still very affordable. Adelaide's rental yield as at December 2017 is sitting at a steady 4.23%, up from the national average of 3.63%. Demand is definitely outweighing supply with quality tenants out and about in high numbers. This is all positive news for investors! 

Tenants

Even with the increasing rents, Adelaide has overtaken Hobart as the most affordable state to rent in the country and there's never been a better time to find the perfect rental property. Particularly at this time of year.

With Adelaide being at the top of many investors' shopping lists, purchasing in Adelaide has been the topic of many conversations across Australia this year already. So the big question is "where should I be investing?" 

Asking this question isn't as straight forward as you would first think. Every agent may have a differing opinion on which suburb is the most popular and where you should be buying.

To answer the 'where' question, the first thing to consider is... is it cash flow that you're after? Or is it capital gain?

Equally as important to consider are questions such as... how long is your investment horizon? Is it strictly an investment? Or will you be living in it yourself one day? And... what type of tenant do you envisage living in your home? All of the above factors will help you narrow the scope of where is best to buy.

So what are our views on the 'where' question?

If you're looking for capital gain, those suburbs that border the city have been performing well (such as Parkside, Norwood, Unley and North Adelaide). The inner west (Thebarton, Richmond and Mile End) is also proving popular for those purchasers looking for value-for-money and a lower price point to enter the market.

If you're looking for cash flow, we are seeing great yields in the north-eastern suburbs such as Golden Grove, Greenwith and Modbury. These suburbs are currently seeing an average yield of between 4% and 5%.

If you are planning on living in the property one day, this is much more straight forward as it comes down to personal preference. It is simply 
a matter of finding a suburb where you could see yourself living!

At Toop&Toop we are passionate about investing in property and would love to share with you what we are finding out on the ground! Please feel free to give myself or our team a call to talk about your investment needs.


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