Rental Boom

Brace Yourself… the Rental Boom is Coming!

I’ve been preaching about a rental boom coming since early last year and now the data is showing it to be coming true.

But if Labor gets in at the next election (as predicted by so many), then this rental boom is going to go to a whole new level.

Let me explain…

According to SQM Research, the current data on vacancy rates is on the way down for most capital cities. Here are the percentage falls by state.

Capital City Percentage Fall
Sydney 1.5%
Melbourne 1.7%
Brisbane 3.2%
Adelaide 1.8%
Canberra 0.8%
Darwin 3.5%
Perth 4.7%

What is worrying is the comment made by the SQM Research managing director, Louis Christopher, that “despite the potential for oversupply, the falls in Sydney and Melbourne are troubling. Significantly, the vacancy rate continued to fall in Melbourne, despite predictions of an apartment oversupply,” he said.

What many people don’t understand is the true impact the banking Royal Commission, APRA and changes to negative gearing has had on our property market.

Combined, these changes have turned off the supply of money from lenders and have artificially caused a slowing down of the market. Lenders are not lending money to developers so there are many projects that are sitting idle and the number of planning approvals are also on the way down.

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Some are even saying that this downturn in the property market is greater than the downturn that occurred during the GFC.

I keep shaking my head over this!

We have some of the best economic fundamentals on record, yet we are experiencing a downturn in the property market. Immigration is high, interest rates are still at record lows and predicted to drop further, our government is stable (from a global perspective) and unemployment is on the way down.

So if everyone didn’t stick their fingers in the pie, we would be swimming along nicely.

However, that clearly has not been the case and according to SQM Research, they believe that “rents could accelerate between 7% to 12% over the period of 2020 to 2022, assuming there is an interest rate cut. Brisbane and Perth are likely to record the largest rises in rents.”

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“How to Set Yourself Up for a $150,000.00 Income in 10 Years.”

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Now this is assuming Labor gets in and repeats what their predecessor did back in the 1980’s, Prime Minister Keating who made changes to negative gearing only to change it back two years later.

I have no doubt that they will make a mess of things and cause the property market to go crazy.

As investors, make 2019 the year of purchasing property so that you can enjoy the rentals increases that are happening now and predicted to continue.

My Prediction

I reckon capital city properties will become cashflow positive as yields rise and should the Labor party get into government at the upcoming election in May, their changes to negative gearing will last around 2 years before they realise they have stuffed the property industry which is full of voters and as a result, will make changes to appease everyone before the following election.

Only time will tell.

Like to know more about how you can profit from the rental boom?

I’m holding a Property Academy event in May where I’ll walk you through it in detail, and show you exactly how it applies to your specific situation…

As well as “How to Set Yourself Up for a $150,000.00 Income in 10 Years.”

Only 50 people will be accepted.

You can pre-register your interest by clicking here

Until next time, keep investing and don’t let the buggers stop you from building your wealth.

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