Ask Your Agent rental tenancy agreement rental success

Published on April 3rd, 2015 | by Chris Snell - Rental Success


Real estate Melbourne – real estate listings, real estate sales and real estate rentals

Melbourne real estate is an apparent wrestle of commentary across all the major banks, economic commentators, the Reserve Bank and the treasurer’s office. Despite the signs of a softening market contradicted by high real estate auctions clearance rates of up to 80% across Melbourne in recent weeks, it is projected that the Melbourne real estate sales market will remain healthy over the long term as property investors continue to actively purchase property and owner occupiers continue to sell and buy respectively. I at times wonder what real numbers might be achieved if there were more real estate listings available on the market.
Inner and eastern suburbs continue to increase in value and a growing supply of new apartments are on offer as a new developments open onto the real estate listings market via a seemingly evergreen supply of construction approvals. Strong population growth is also causing massive development demand for housing and accompanying infrastructure. According to a recent report on 31st March 2015 by the Australian Bureau of Statistics, “Melbourne had the largest growth of all Greater Capital Cities (up by 95,700 people), followed by Sydney (84,200), Perth (48,400) and Brisbane (38,500).” It is no surprise that the outer suburbs and rural urban fringe areas such as in the northwest of the city where land is relatively cheap continues to reap the rewards of the developers eye. First home buyers are heading to these outer areas also to satisfy a desire to enter the property market and secure affordable homes away from the savvy investors market.
Whilst real estate sales may remain strong in the short term, recent reporting from CoreLogic RP Data Home Value Index results seem to indicate that Melbourne’s dwelling values may be on the decline. Research analyst Cameron Kusher says the city has moved past its cyclical peak, which was 11.9% in January 2014. It is worth noting that CoreLogic RP Data results show that Melbourne continues to have the lowest rental yields of all the capital cities, for both houses (3.3%) and units (4.2%) but this does not necessarily mean that landlords are sitting around with vacant properties. The team I manage at hockingstuart, having just come off the peak rental season (January – March), has leased some 350 real estate rentals across the CBD and inner Northern suburbs including, North Melbourne, Carlton, Brunswick, Collingwood, Northcote, Fitzroy and Melbourne. Subsequently our current stock list of properties being offered for lease is now the lowest I have known it in 5 years. Furthermore show me a leading bank that is offering 4% term deposit returns – it is just not achievable in the current market.
Consumer confidence in property remains upbeat and the pursuit of new lands by developers continues to provide opportunity for confident buyers. The Real Estate Institute of Victoria has also released data showing that demand from families wanting more space has led to strong price growth in four-bedroom homes over the past year. The median price of four-bedroom homes grew in inner, middle and outer Melbourne by 3.9%, 4.2% and 5.6% respectively. However, the biggest median price change in the outer suburbs was for smaller, two-bedroom homes. These were up 7% (to $390,000). This suggests that Melbourne’s rising property prices have increased demand for these more affordable smaller houses, which offer a good way to enter the market. Investors are likely to enjoy high occupancy with such investments as well as long term capital growth.
Melbourne real estate is not simply a wrestle of commentary it is a unique tension between sellers of real estate listings and buyers to the transaction of real estate sales woven into the fabric of a distinct tension between home buyers and real estate investors. Did somebody say “yield”? Lets defer that topic for another day.
Chris Snell is a licensed real estate agent and actively manages a substantial property investment rental management team within the hockingstuart group of offices Melbourne.

About the Author

Chris Snell is a licensed real estate agent and started his property career in 1992. Chris has experience in real estate sales and rental property management services. Chris has developed an excellent professional knowledge of all matters associated with rental property management and tenancy related issues. Chris manages a top tier property management company and aspires to educate property investors and landlords on the important aspects of rental success.

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