Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Wednesday, 22 April 2015

Rental growth over time...

Long term rental growth

Another perspective on rents.

Although rental growth may be slowing, rents have continued to rise in nominal terms across the board over both a five and a ten year time horizon.

Over the past five years the rental index has shown growth in Sydney (+23 per cent), Perth (+21 per cent), Melbourne (+15 per cent), Brisbane (+13 per cent), Darwin (+21 per cent), Hobart (+10 per cent) and Adelaide (+16 per cent).

Over 10 years the increase in capital city rent indices has been substantial.

Such is the nature of compounding growth.

Although rental growth ebbs and flows in cycles, it is this dynamic which ultimately tips the balance in favour of being a homeowner over a long term renter.

This is also why the "don't buy a house" campaign, while probably well-meaning in its intention, was also likely to fail to gain traction in full. 

In an inflationary economy rents are likely to continue increasing over the long term and therefore most Australians are likely to aspire to own an unencumbered home for the purposes of their retirement.


And this is what is helping to keep a lid on apartment rents in particular right supply!

A view of Brisbane's West End snapped from the Regatta this week. 

West End and South Brisbane are two suburbs in particular with a mass of new supply coming online.

See here for more details.