But… But Rents only go up! Don’t they?

Lindsay David and Philip Soos at LF Economics demonstrate real rents are falling across the country, except in Hobart. This is only possible with falling wages, weak demand and excess housing supply.

Little landlords have no compunction about evicting bolshie tenants – but they will now be doing everything possible to keep good-paying renters.

Very big falls in Perth and Darwin, on the end of the mining construction boom. The magnitude of change would be even greater on the ground, considering rents are usually reviewed annually which smooths the aggregated figures.

The falls can only worsen the already stratospheric price/rent ratios.

Elsewhere, the Housing Industry Association released the latest residential lots sales data today, and it isn’t pretty.

Sure, lot prices have gone up. Yet the downturn in volumes continues and accelerates, to the lowest sales in five years. Less than 10,000 lots sold last quarter – against very high population growth.

Anyone familiar with the share market knows rising prices on falling volumes is an alarm signal and an anomaly Mr Market WILL remedy. This market begs for a correction.

Leave a Reply

*
*

https://prosper.org.au/2017/04/26/but-but-rents-only-go-up-dont-they/