STATE OF THE STATES INVESTOR EDITION
Did you invest in property during the pandemic ? If so , the value of your asset may not be shooting up like it was last year . But it ’ s unlikely the property is vacant and depending on where you are , you ’ re likely to be experiencing strong rental growth .
Strong rental growth is set to continue . International migration has started up again and the federal government has recently announced an increase to the permanent resident intake to 195,000 this year to help with labour shortages . While more people are moving to Australia , housing supply will be constrained due to construction costs . While this supply / demand imbalance is likely to mean that house prices don ’ t fall as much as they otherwise would in an increasing interest rate environment , it also means that rents will rise for a while longer .
Last year was all about price growth but it certainly wasn ’ t about rental return . Residential rental yields hit their lowest level ever recorded at the start of this year but are now steadily increasing . Depending on where you buy , you may be able to balance out lower price growth with an increase in your rental return .
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