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October 08: Rents to jump as property supply falls

by Staff Reporter7 minute read
The Adviser

Rising rental yields and sustained sharemarket falls may lure investors back into the property market, research house RP Data predicts.

Tim Lawless, RP Data’s national research director, said Australia’s housing shortage was likely to intensify as the number of new dwelling constructions fell significantly short of the levels required. As a result, rentals would increase substantially which may prompt investors to act.

“Rental rates for houses increased by 11 per cent over the past 12 months,” Mr Lawless said.

“We would expect to see rises in weekly rental rates of a similar magnitude over the coming year.”

Construction of approximately 157,000 new dwellings began in the year to 30 June, ABS figures recently showed. This was well below the 200,000 needed, according to Commonwealth Treasury estimates.

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