Asking rents have slowed down across many localities in Australia. According to analysts who are watching the situation closely, this may indicate that first home buyers are increasing their activity.
Throughout 2012, landlords increased rents slower than they did in 2010 and 2011. It may suggest that many renters are now looking to buy into their first homes. The last few months have seen Australian rental yields loosing pace. The housing market has recovered in the last few months, and many former renters have exited in favour of their own homes. As a result, vacancy rates have loosened in many areas.
But rental demand has not decreased everywhere. It differs broadly and industries such as mining have left their impact. For example, Darwin and Perth have recorded a solid increase in asking rents across localities; while on the other hand, the rental market in Sydney seems to be slowing down. Another example is Melbourne. In Melbourne, there are pockets where oversupply exists contrasting with pockets where there is under supply. This indicates that there are markets inside markets.
Asking rents have softened in four capitals among eight, for both houses and units if you compare it with figures from twelve months back.
In some Australian state capitals, rents are looking up but it is mixed with buying activity across the country. In some places rental incentives such as rent free periods are also being offered, especially in the market for retail leasing. Landlords can claim dedications on some of these rental incentives and it makes the property more attractive. In Melbourne, some operators of shopping centres have lowered rents already.
Coming back to residential properties, in places such as Perth where rents had been strong first homebuyer activity seems to be picking up.
Home sales are still subdued in some areas and because owners are not getting acceptable prices on their properties, they are putting them up for rent, until their prices increase. This means those who are looking for rental properties have a greater choice when it comes to selecting the home they want to rent.
Some landlords who find that they are not receiving as many rental calls as they expect, have also lowered their expectations of rent. Some of the first homebuyer activities can also be attributed to various government schemes launched to encourage first homebuyers to come into the market.