Rents on the Rise: Time to Invest?

According to new report from Domain rents are on the rebound across the country.

Property investors may be eyeing the uptick in the rental sector with vacancy rates falling and rents rising ROI is on the up.

According to Domain's Senior Research Analyst, Dr Nicola Powell:

“What we are seeing is a lift in rents across the country, but it’s certainly not uniform, even across the capital cities, we’re seeing that inner city locations are weaker compared to outer and even regional areas, where rent growth has been very strong.”

The pandemic-inspired population movement from inner cities to the suburbs and regional areas beyond are a key driver behind rental growth.

Dr Powell continued:

“During the pandemic, that was a trend. If you look at the rental market, there is less friction in moving and its easier for a tenant to relocate than it is for a homeowner who has to sell up and purchase a new property. I think the change has been quite rapid in the rental market.”

“If we look towards the future, the question is whether these trends are here to stay. Particularly when we’re seeing rental growth in inner city areas, especially in inner Sydney, which was most disrupted by rents. What we’ve now seen over the quarter is rents in these areas either holding steady or increasing.”

“We might be now seeing a turn of events where some people migrate back into the city as we go back into the office or revert to a more hybrid working environment. We have seen a trend of people moving to ‘lifestyle’ locations, and strong rental growth in places like the Northern Beaches in Sydney or the Mornington Peninsula in Melbourne, as well as regional areas, but my view is that, long term, for capital growth or rental growth, it will be those regional locations that are connected to a central working hub.”

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