Stag-Rental - Property’s Answer to Stagflation
Thursday, July 31st, 2008
Photo: Colin Cheesman
RENTS are expected to jump another 10% this year after building approvals fell to their lowest since the end of 2006.
Home-building approvals have dropped nearly 8% in a year, after falling another 0.7% in June, in seasonally adjusted terms. Apartment approvals have dropped 22% in a year, down 1.4% in June after a 19.5% slump in May.
Rents to increase a further 10% this year on top of the 12.7% increase over the last 12 months? Have our wages increased by 22%? No. They never will. Not from the waged sector. But those earning speculative income regularly have such growth.
But why the lack of new homes? Most likely is that land prices have reached such a zenith that it is no longer economical for builders to undertake risky ventures. The supply of cheap credit over the last decade has been filliped by tax carrots magnetising entrepreneurs into the land banking market. Thus the bubble in land prices.
Stag-Rental?
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