Higher rents predicted as property investment lending falls
People renting houses can expect to pay increasing rents during the coming financial year due to a significant drop in lending for property investment according to Paul Bennion, Managing Director of tax depreciation specialists DEPPRO. Mr Bennion said that the latest ABS figures showed that lending for investment housing in Australia fell by nearly $5.0 billion or 23% to $16.2 billion during the September 2008 quarter compared to the September quarter 2007. “This major fall in property investment means that there will be fewer rental properties moving forward at a time when there is already a shortage of rental properties in many parts of Australia,” Mr Bennion said.
Over the past year, average weekly rents in many capital cities have increased by more than 10% and this trend is likely to continue due to this decline in property investment. “Investment in property has declined due to the growing economic uncertainty being caused by the global financial crisis. However, the good news for existing property investors is that they should receive rising rents while at the same time mortgage repayments will decline due to falling interest rates.”
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