Invest
Rents picked to increase as credit remains tight
Landlords may soon be in a position to increase rents as the current credit crunch could see a rise in supply shortages.
Rents picked to increase as credit remains tight
Landlords may soon be in a position to increase rents as the current credit crunch could see a rise in supply shortages.
Forza Capital directors Adam Murchie and Ashley Wain believe the current credit squeeze affecting both investors and developers may create conditions for landlords to increase rental yields in the long term as vacancy rates drop and supply becomes constricted.
“This (the offering of credit) will take time to mobilise again, and it is going to create a supply bottleneck. Eventually, this will see prices increase,” Mr Murchie said.
His colleague, Mr Wain, agreed, explaining this dynamic will likely impact rents as the rental market becomes increasingly competitive.
“Essentially, the affordability crisis is going to be relocated from owners to renters short term,” he said.
“Add in population growth that’s not tapering to the same degree as supply, in future years we are going to see some real pressure on housing supply and demand.”
Credit situation relaxing but unlikely to improve supply
In a move acknowledging the impact tighter lending conditions may have on supply and rental prices, the Australian Prudential Regulation Authority last year relaxed the long-term limit it placed on lenders to keep investor borrowing below 10 per cent each year and lifted the 30 per cent cap it had placed on the offering of interest-only loans.
However, experts have been sceptical that the changes will increase investor interest in the property market as dwindling house prices affecting sentiment are likely to keep interested parties out of the market for some time.
Long term, Mr Murchie and Mr Wain suggest this could result in a drop in rental supply.
Short-term affordability a different story
Despite Mr Murchie and Mr Wain’s forecast, recent data concerning rental affordability in Australia suggests affordability has improved of late.
The Real Estate Institute of Australia’s most recent Housing Affordability Report, released in December, found that, on average, rents fell over the September quarter of 2018, with the proportion of income needed to meet rental payments falling to 23.9 per cent.
This was the equivalent to a 0.5 per cent drop in prices compared with the same quarter in 2017.
RELATED ARTICLES
Property
Australian property’s quiet pivot: resilience hides a new competitive map
Australia’s housing market remains sturdier than the macro noise suggests, but the sources of resilience have shifted. For operators, the profit pool is migrating from ‘volume at any price’ to ...Read more
Property
Gen Z’s 5% deposit rush: how policy‑driven demand is reshaping Australia’s housing value chain
A government-backed 5% deposit guarantee has triggered a surge in first-home buyer intent among Gen Z, pulling forward demand and resetting competition across banks, brokers and buildersRead more
Property
Cautious bidders, smarter sellers: a Queensland auction case study on repricing risk
Queensland’s auction market has hit a caution cycle as buyers price in higher borrowing costs, global uncertainty and cost-of-living pressure. Clearance softness is forcing agencies to re-engineer ...Read more
Property
Trust, technology and triage: what NSW’s ‘name and shame’ signals for real estate governance
NSW’s latest enforcement action on real estate trust accounts isn’t a one-off embarrassment; it’s a stress test of sector governance. With licences suspended and penalties applied, the message is ...Read more
Property
Vacancy is rising, demand is resilient: A case study in defending yield as Australia’s rental cycle rebalances
After a blistering run, Australia’s rental market is loosening at the edges. Vacancy is edging up off historic lows, rent inflation is set to moderate into 2026, yet underlying demand remains ...Read more
Property
Don’t lose the deposit: A case study in stopping real estate payment fraud — and the ROI for doing it
Deposit redirection scams are quietly eroding buyer savings and agency reputations in Australia’s property market. This case study unpacks how a mid-tier real estate group redesigned its settlement ...Read more
Property
The $12m threshold: Why portfolio value, not property count, now defines Australia’s investor elite
The old yardstick of six properties as shorthand for investment success has been overtaken by a harsher reality: in today’s market, elite status is defined by balance-sheet strength, not asset countRead more
Property
From intuition to instrumentation: How a "two-stakeholder" sales playbook lifted close rates and cut cycle times
High-stakes consumer purchases are increasingly joint decisions. When one partner is under-served, deals stall. This case study follows an Australian real estate group that rebuilt its sales motion ...Read more
Property
Australian property’s quiet pivot: resilience hides a new competitive map
Australia’s housing market remains sturdier than the macro noise suggests, but the sources of resilience have shifted. For operators, the profit pool is migrating from ‘volume at any price’ to ...Read more
Property
Gen Z’s 5% deposit rush: how policy‑driven demand is reshaping Australia’s housing value chain
A government-backed 5% deposit guarantee has triggered a surge in first-home buyer intent among Gen Z, pulling forward demand and resetting competition across banks, brokers and buildersRead more
Property
Cautious bidders, smarter sellers: a Queensland auction case study on repricing risk
Queensland’s auction market has hit a caution cycle as buyers price in higher borrowing costs, global uncertainty and cost-of-living pressure. Clearance softness is forcing agencies to re-engineer ...Read more
Property
Trust, technology and triage: what NSW’s ‘name and shame’ signals for real estate governance
NSW’s latest enforcement action on real estate trust accounts isn’t a one-off embarrassment; it’s a stress test of sector governance. With licences suspended and penalties applied, the message is ...Read more
Property
Vacancy is rising, demand is resilient: A case study in defending yield as Australia’s rental cycle rebalances
After a blistering run, Australia’s rental market is loosening at the edges. Vacancy is edging up off historic lows, rent inflation is set to moderate into 2026, yet underlying demand remains ...Read more
Property
Don’t lose the deposit: A case study in stopping real estate payment fraud — and the ROI for doing it
Deposit redirection scams are quietly eroding buyer savings and agency reputations in Australia’s property market. This case study unpacks how a mid-tier real estate group redesigned its settlement ...Read more
Property
The $12m threshold: Why portfolio value, not property count, now defines Australia’s investor elite
The old yardstick of six properties as shorthand for investment success has been overtaken by a harsher reality: in today’s market, elite status is defined by balance-sheet strength, not asset countRead more
Property
From intuition to instrumentation: How a "two-stakeholder" sales playbook lifted close rates and cut cycle times
High-stakes consumer purchases are increasingly joint decisions. When one partner is under-served, deals stall. This case study follows an Australian real estate group that rebuilt its sales motion ...Read more
