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ISCOVER
Staff Reporter
While Australia’s house prices continue to soften, the nation’s weekly rental rates are surging north.
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According to RP Data’s latest Hedonic Home Value Index, capital city home values fell 2.1 per cent in the March quarter. In contrast, weekly rental rates have risen 4.6 per cent over the last six months.
“In contrast to the fall in home values, gross rental yields have been improving with apartments and houses now delivering a gross return of 4.9 per cent and 4.2 per cent, respectively, in March 2011 according to RP Data- Rismark’s estimates,” RP Data research director Tim Lawless said.
Brisbane recorded the weakest results over the quarter and the year.
“Unsurprisingly, the flooding that has occurred within South East Queensland has likely compounded Brisbane’s weak market conditions. Brisbane homes were the worst performers during the March quarter, with values tapering sharply by 4.6 per cent. Brisbane values are down 6.8 per cent over the year to March 2011,” Mr Lawless said.
The moderation in Australian housing valuations are likely to be warmly welcomed by prospective home buyers, particularly first timers who have been confronted with affordability barriers.
“With household incomes growing at 6 per cent per annum, interest rates potentially approaching the peak of the tightening cycle, rents increasing, and house values going nowhere, buyers are seeing an improvement in their position,” he said.
