Invest
‘Worrying’ rental yields declining in hot markets
As investor activity remains unabated in the Sydney and Melbourne property markets, rental yields will continue to soften, according to an Australian economist.
‘Worrying’ rental yields declining in hot markets
As investor activity remains unabated in the Sydney and Melbourne property markets, rental yields will continue to soften, according to an Australian economist.
With investors still flocking to the market, the rental yields their Sydney and Melbourne properties are likely to achieve in the short term are minimal, AMP chief economist Shane Oliver says.
“I think rents will keep slowing down. Rent yields were only 0.6 per cent year to December quarter so that's already quite soft,” Mr Oliver told Nest Egg.
“Looking at the REA data, it seems as if rental yields are still falling so if you’re in Sydney and Melbourne you’d struggle to get a net rental yield of much above 2 per cent.”
Despite this, investors remain undeterred, appearing to prioritise potential capital growth over yields.
“It seems investors are ignoring the relatively low net rental yields but are after the capital gains prospects and I suspect that’s becoming a bit bubbly that prices are continuing to go up at a rapid rate because they’re expected to and they keep buying into the market,” Mr Oliver said.
While he remains sceptical that a housing bubble exists, Mr Oliver said there is a danger in this type of speculative investment.
“You’re not taking note of the fundamentals, being that yields are low and income growth is slow, [and are] focusing on capital growth instead,” he said.
“When investors start to make up 50 per cent of the market in this environment, it can be a bit worrying.”
Stock market
Beware the reversal of the sharemarket rally, expert says
The companies that offer the greatest risk for investors in 2021 are somewhat ironically many of the same companies that have provided the greatest return to investors in 2020, an expert has warned. ...Read more
Stock market
Is climate change the next big investment theme?
Investors looking to outperform the market are being urged to look at structural growth, with climate change likely to create the biggest investment opportunity since the internet, an industry expert ...Read more
Stock market
All Ords set for new record by February, analyst predicts
The Australian market is likely to reach a new record in the early months of the year, with a win on the health front likely to offset geopolitical issues, an analyst has stated. ...Read more
Stock market
Aussies flock to fixed interest and ETP products for stable returns
Investors seeking stability during the COVID-19 pandemic have turned to fixed interest and cash exchange-traded products, new research has revealed. ...Read more
Stock market
Emerging market equities gain traction in post-pandemic world
Emerging market equities are making a comeback as technology-savvy consumers flock to capitalise on new opportunities that the 2020 pandemic may have made too attractive to ignore. ...Read more
Stock market
Is it too late to start investing in market index ETFs?
With the Australian market recovering its losses since the pandemic began, nestegg asked an industry expert if it was too late for investors to begin their investing journey. ...Read more
Stock market
Is it time to buy reopening stocks?
Investors are being advised to look into stocks that could benefit from markets reopening, an analyst has stated. ...Read more
Stock market
Stocks to watch in 2021
Easing political uncertainty, new vaccine hopes, central bank’s willingness to do all it takes and more, and new stimulus packages are likely to act as tailwinds for investors, an analyst has said. ...Read more
Stock market
Beware the reversal of the sharemarket rally, expert says
The companies that offer the greatest risk for investors in 2021 are somewhat ironically many of the same companies that have provided the greatest return to investors in 2020, an expert has warned. ...Read more
Stock market
Is climate change the next big investment theme?
Investors looking to outperform the market are being urged to look at structural growth, with climate change likely to create the biggest investment opportunity since the internet, an industry expert ...Read more
Stock market
All Ords set for new record by February, analyst predicts
The Australian market is likely to reach a new record in the early months of the year, with a win on the health front likely to offset geopolitical issues, an analyst has stated. ...Read more
Stock market
Aussies flock to fixed interest and ETP products for stable returns
Investors seeking stability during the COVID-19 pandemic have turned to fixed interest and cash exchange-traded products, new research has revealed. ...Read more
Stock market
Emerging market equities gain traction in post-pandemic world
Emerging market equities are making a comeback as technology-savvy consumers flock to capitalise on new opportunities that the 2020 pandemic may have made too attractive to ignore. ...Read more
Stock market
Is it too late to start investing in market index ETFs?
With the Australian market recovering its losses since the pandemic began, nestegg asked an industry expert if it was too late for investors to begin their investing journey. ...Read more
Stock market
Is it time to buy reopening stocks?
Investors are being advised to look into stocks that could benefit from markets reopening, an analyst has stated. ...Read more
Stock market
Stocks to watch in 2021
Easing political uncertainty, new vaccine hopes, central bank’s willingness to do all it takes and more, and new stimulus packages are likely to act as tailwinds for investors, an analyst has said. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
