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Rent rises to increase in 2010

Sydney rents will increase by up to 4.4 per cent this year as economists predict an end to the sluggish growth of 2009.

A healthy economy, rising interest rates, and land tax increases would all push up rents beyond the 2009 increases of 2.2 per cent for houses and 2.4 per cent for apartments, an economist has told The Sydney Morning Herald newspaper.

"It is clear that in 2009 rents were generally kept in a holding pattern as landlords and the market waited to see the end of the global financial crisis," Matthew Bell from Australian Property Monitors told The Herald.

"Sydney rents are likely to increase by at least double the 2009 rate of 2.2 per cent to approach the $500 per week level for houses.

" As prospective home buyers look for the best time to jump into the market, many of the nation's top housing analysts have forecast modest residential price growth of about five or six per cent in 2010.

Some of Australia's leading economists believe demand for homes will stay strong as investors and up-graders pick up the slack from first home buyers.

But a small group of doomsayers are convinced a combination of rising interest rates, the winding up of the first home owners grant boost and over-inflated prices could lay the foundations for a crash.

Happily, the nation is emerging from the global financial crisis with strong population growth, the lowest interest rates in decades and a rosier jobs outlook.

Most economists, industry heads and real estate agents see the sun continuing to shine on residential property next year.

BIS Shrapnel senior project manager of residential property Angie Zigomanis predicts steady growth of about five to six percent in established residential property next year.

"I'd expect you'd see steady low-to-mid single digit growth next year," Mr Zigomanis told AAP.

"Over the next two or three years I think you'll find interest rates will keep slowly edging upwards and it'll keep a lid on the massive double digit price growth we were seeing previously."

Source: http://money.ninemsn.com.au/article.aspx?id=993433, 13/01/10

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