Five interest rates rises in the last seven months are having an impact on Australia’s rental market, with rental price growth tipped to head back towards 7-10% over 2010. Australian Property Monitors’ report on rental prices shows rents rose 1.5% in the March quarter on a national basis, the biggest jump in a year.
In Melbourne, the quarter-on-quarter median rental increase for units increased by 1.5% to $340 whilst year-on-year saw median rentals climb 3.0%.
Rising interest rates will add to the costs of those property investors with mortgages, forcing rental costs to rise. Improving rental yields are likely to tempt more investors into the property market, which is likely to add further pressure to house prices.