Surprise, surprise, we’re going up
back of the first home owner boost at the end of the month and intense media speculation of imminent interest rate rises contributed to the slowdown.
We anticipate that in coming months slower growth will continue.
The winding back of first-home incentives and interest rate rises of 2 per cent over the next 18 months will result in a decline in home loan affordability and people remaining in the rental market.
This is good news for property investors because rental yields and rental rates have been falling.
Melbourne house rents peaked at $391 a week in February this year and fell to $373 a week in September, a 4.5 per cent slide.
Unit rents have fallen 2.9 per cent from $353 a week to $343 a week.
Despite the slowdown in growth in September, house rents fell $9 a week and unit rents fell $6 a week.
The double whammy of rising values and falling rents has eroded yields, which peaked at 4.5 per cent for houses and 5.0 per cent for units and now sit at 3.9 per cent and 4.5 per cent respectively.
We anticipate that in coming months an already tight rental market coupled with a continuing undersupply of new dwellings will result in rental increases and yield improvement.