The rental tightrope
In Australia some 80% of residential rentals are provided by private landlords, so any changes in property’s appeal as an investment can have a quick and dramatic effect on rental prices. According to Macquarie Bank the UK government provides more than half of London’s rentals, and in the USA massive trusts own large tracts of residential apartment rentals. Despite having this more resilient supply source both of those countries are also witnessing strong rental growth.
Locally a number of issues have combined recently to persuade some investors away from the residential market: tax rate reductions have reduced the net benefits, the stock market’s been delivering excellent returns, and superannuation’s new tax status has seen that vehicle soak funds away from residential property. With surging housing demand (including the highest net overseas migration in 17 years) it’s no surprise most forecasters are pointing to further strong rent rises.
Queensland’s tenancy laws are currently undergoing another review and landlords are watching with interest to see whether the Residential Tenancies Authority will provide any new disincentives to property investment. As any government body should the RTA is responding to consumer concerns including the failure of some agents and owners to respect tenant’s rights. Among their proposed changes: new options for tenants to challenge rent rises, limits on inspection times and the option for some tenants to cancel their lease if the property’s up for sale.
Bees Nees City Realty have approached the RTA’s General Manager Fergus Smith for further info and he’s agreed to speak at our special breakfast for landlords on Wednesday June 20th 2007 . If you’d like to come to the breakfast as our guest and hear what changes might affect property investors RSVP’s are essential. Please email email@example.com or call Michelle on 07 3214 6888. We’re holding it at the Convention Centre at South Bank at 7.15 for 7.30am to 8.45am. Public consultation on the Act’s review closes on the 22nd June and there’s more info at www.rta.qld.gov.au