There has been an increase in rental demand in regional areas as people have left the city, move further out and enjoyed a “work from home” set up. Also, with the pandemic and the lack of international students, migration and tourism the rental demand in the city has dropped significantly.
The total rental rate of return has consistently declined over the past five years. However, this is part of a normal real estate cycle, and rents are expected to rise steadily and significantly over the coming years. Though this will become quite a challenge for those looking for an affordable place to stay, it is great news for real estate investors.
As we begin opening the domestic and international borders for travel, we are slowly getting back to normal population growth in the cities, putting pressure on rental demand in the Australian capitals again. Inflation could increase sharply over the next few years, as supply chains are still broken and wage growth is likely to continue.
All of these factors will continue to move a real estate market forward, especially if we see economic headwinds and global health improvements as well.
All this to say the outlokk for property is good as long as you select the right property and the right location. So make sure your next property purchase is based on independent research, not on the latest media headlines.
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