Vacancy rates in Canberra are increasing slightly in what could seem as an indication people there are concerned about their employment prospects going into the Federal election. The vacancy rate in Canberra has increased over the past 12 months from 1.1 per cent to 1.7 per cent. SQM Research says this indicates the rental market is slowly starting to loosen up… and it’s expected the vacancy rate might rise even further after the federal election. The Perth vacancy rate has also increased from 0.7 per cent to 1.5 per cent as the mining boom tapers off. The rest of the capital cities are pretty steady but SQM Research says vacancies rates could start to rise over spring as first homebuyers exit the rental market to take advantage of record low interest rates on offer at the moment.
It seems the record low interest rates are already impacting the Sydney property market. RP Data reports Sydney houses for sale are now spending just 30 days on the market and units – just 28 days, indicating that many properties are being snapped up as soon as they’re listed. This compares with Brisbane, Adelaide and Perth houses, which need around double the amount of time to sell. However, RP Data believes the tough competition in Sydney could actually be a good thing for the Brisbane and Adelaide markets which are still pretty flat at the moment. The price gap between Sydney and Brisbane is now at its greatest level since 2006 – a difference of almost 33 per cent. RP Data believes the gap could actually increase over the coming months and that might encourage investors to start looking at more affordable markets such as Brisbane and Adelaide.
Finally, small houses are now the preferred investment over units, for first time property investors, according to a Mortgage Choice survey. Small houses with one to three bedrooms are preferred by almost half of first time investors, and larger homes with four or more bedrooms are also considered a good choice. That’s probably thanks to lower interest rates making houses more affordable and buyers being a bit turned off by body corporate rates which can be high in some complexes. Houses are especially popular in South Australia but units are still pretty popular in New South Wales. First time investors also factor in the type of suburb and street, tenant demand and population growth of the area when considering whether or not to buy an investment property.