It’s been suggested that soon 40 per cent of Australia’s population will be renters because of affordability issues and lifestyle choices. Clearly, Australia is in need of more property investors if we want to avoid risk of a rental crisis.
Australia needs to build an additional three million homes over the next two decades to provide the needed infrastructure to house Australia’s growing population.
The oversupply of dwellings in many markets is dwindling and there are very few new projects of significant size on the drawing board. Considering how long it takes to build new estates or large apartment complexes, there may be an undersupply of well-located properties in our capital cities in the next year or two.
Even though we continue to build houses in Australia for future population growth, the trend towards a renting property market is likely to continue to rise.
It is clear that Australia needs private landlords to provide accommodation for those who need or want to rent.
Fewer property investors might potentially create a difficult environment for would-be tenants. An imbalance between rental property supply and tenant demand tends to result in higher rents.
We’re experiencing the highest growth in rents for almost two decades.
Regional rents are rising even faster than capital city rents, with the 12.5 percent annual rate of rental growth in September this year said to be the highest annual growth result on record since the CoreLogic rental index began in 2005.
The Property Investor Sentiment Survey, conducted by Property Update and Yahoo Finance, has been around since 2011. It recently polled more than over 1,700 property investors and would-be investors for their input. Eighty-three per cent of those surveyed owned at least one investment property.
The survey found that Australian property investors focus on long-term capital growth rather than cash flow and that many look for a property that has the potential to add value.
While many factors affect property values, the main drivers of property price growth are consumer confidence, low-interest rates, economic growth and a favourable supply and demand ratio.
Recognising there are multiple real estate markets around Australia, home prices continue to rise and auction clearance rates remain high. Rising prices is an obstacle for many first-time home buyers, of any age. They turn to the rental market, where the tightness in the supply of rental homes has already resulted in a sustained increase in rents.
Property investment is still considered to be one of the biggest investment opportunities of all time.
It’s clear that property investor confidence remains strong and those whose finances allow plan to take advantage of the investment opportunities the housing market is currently offering by buying another investment property.