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Time To Raise The Rents

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Just got the monthly newsletter from my letting agent in Sydney (Bradfield and Pritchard - Double Pay). They're normally quite balanced on most matters (they've acknowledged the weakness of the market for sales for quite a while now), although they do tend to big up their sales (it is a marketing doc, after all).

The interesting thing is that they're reporting the lowest vacancy rate in Sydney for 10 years (2.2%) and the strongest increases in rents in a similar time frame (having had no real increases for 8 years - it's been a good time to rent in Sydney in the last couple of year).

Bear in mind that post the last boom, in one year in Sydney (I think it was 1985) rents went up 40% in one year (on absolute, not yield terms)... I'll admit to being completely VId on this (being a landlord), but a 40% rent increase is equivalent to an awful lot of interest rate hikes for a mortgage payer.

Sydney sales prices have been flat or off 5 - 10% for the last 2 years or so, leading to no new builds of BTL-style flats being initiated for almost a year (hence reduced vacancies), so perhaps they're a year to 18 months ahead of the UK on the trend.

Would be interested to hear how the STR brigade view this and whether they've factored significant rental rises into their models in a similar way to the factoring in or reduced or flat house prices.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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