Anyone watch Media Watch about rents tonite on the ABC?

[Realist]

They had a very good article on the current rental "crisis".

For instance the NSW tenancy Association said they thought rents may rise 40% in the next 5 years. Which is a mere 8% per year!!

The Daily Telegraph then reported the next day "RENTS WILL RISE 40% IN THE NEXT 2 YEARS"

CRISIS they said !!

It's all overhyped bollocks.

You can see it on the ABC website http://abc.com.au/mediawatch/vodcast/

It was quite interesting. And essentially proved there is no CRISIS and rents will only rise slightly.

A good program, well worth a watch.

Who'd have thought the media would overhype this issue?

 

[2020hindsight]

realist, yep, mediawatch, best show on TV - all media hype - some suburbs will probably fall more than 10%, large house in mosman might increase 22% etc, but totally atypical. (btw, did you see the exposure of the corrupt scientists on global warming - four corners)

 

[CanOz]

They had a very good article on the current rental "crisis".

For instance the NSW tenancy Association said they thought rents may rise 40% in the next 5 years. Which is a mere 8% per year!!

The Daily Telegraph then reported the next day "RENTS WILL RISE 40% IN THE NEXT 2 YEARS"

CRISIS they said !!

It's all overhyped bollocks.

You can see it on the ABC website http://abc.com.au/mediawatch/vodcast/

It was quite interesting. And essentially proved there is no CRISIS and rents will only rise slightly.

A good program, well worth a watch.

Who'd have thought the media would overhype this issue?

Just curious...and too lazy too look this up but what should the mean rental growth be? Surely rental prices don't normally grow by 8% do they? Would they normally grow somewhere in the same vicinity as the CPI?

Just wondering.

 

[wayneL]

It's a bit like predicting where the ASX will be in 5 years

Harry Dent told us Dow 40,000 by now Ahahahaha!

 

[wayneL]

realist, yep, mediawatch, best show on TV - all media hype - some suburbs will probably fall more than 10%, large house in mosman might increase 22% etc, but totally atypical. (btw, did you see the exposure of the corrupt scientists on global warming - four corners)

Link?

<edit> found it http://www.abc.net.au/4corners/content/2007/s1854517.htm

 

[Kimosabi]

Yep, found it somewhat entertaining. Real Estate agents are obviously starting to get desperate, and if any of them have been watching the Meltdown in the US Real Estate market, they are only going to get even more desperate.

 

[Happy]

It all depends on demand and availability.

At the moment, until 1 Jul 07 some people have time to sell up to $1,000,000 of whatever and top up super tax free.

This is rare opportunity and looks that some rental property owners are inclined to sell and take advantage as next year topping up super will not be as generous in tax concession, but who knows?
Due to popular demand, deadline can be extended, as was with health insurance.

This single incentive seems to create extra pressure on availability.

Exact percentage of rent increase is anybody’s guess, but if property prices are not going to slump, rent has to go up to increase yield.
If not, more people might consider exit from rental business giving extra dent in availability.

Waves and ripples will be going for a while, until next time, when rent will be negotiable down and extras, like free use of car will be thrown in to incite potential tenant to sign the lease.

 

[theasxgorilla]

This single incentive seems to create extra pressure on availability.

In consideration of supply/demand economics one must realise that the property itself doesn't disappear. The dwelling is still there to be lived in. All other things being equal (which, of course, they never are), IF your one-off superannuation top-up driver manifests in the property market with people selling off their investment properties the question beckons, who buys them?

If it's renters converting to owner occupied then the need for rental stock will dwindle at the same time as rental stock itself dwindles. Supply/demand largely unchanged, perhaps?

If they sell to other investors then the rental stock remains, doesn't it? Supply/demand still largely unchanged, perhaps?

No doubt in the perpetual flux state of the market the outcome will be a mixture of both.

The only opportunity I see out of this is that there might be some current investment property owners who want to sell before the deadline arrives. Therefore, they may be prepared to give a little on price. Therefore, as a buying investor your yield will improve. Or, if you are an owner occupier you might have some money left over for furniture, or a bigger deposit and lower repayments etc.

The upward pressure on rent is a trend that is playing out slowing and surely, and has already been in play for quite a while now. It's not like the media to report on something that is already happening (ie. they can't be wrong) but to try and link it to some future event so that going forward they STILL can't be wrong YET they look like they're cleverly predicting something, and in the meantime telling us something EXPERTS think we all need to know.

Rents are still going up. How much and for how long, who knows? There might be an opportunity to buy at a slight discount, but don't expect the sales copy to read, "Desperate baby-boomer (soon-to-be retiree) needs to sell as once off superannuation contribution deadline draws closer".

 

[Happy]

Some <creative financing> advocates investment property owners to take loan, up to ¾ of the property value to beat the deadline and place loan into super, instead of lowering price to find buyer.

Not sure if this was run through TAX office and received the nod, or this is wishful thinking that beating the deadline will automatically extend tax relief.

I would imagine, that sell date of investment property is important, but this is not important in our discussion, what might be important are future implications.

Loan costs money, once ¼ buffer starts to melt away, we might see fury of desperate sales later on in 2008 or even 2009.
As any other possibility it might not materialise.