Arnold
CibbuanoRental Investment Returns
July 27th 2006 00:19
This chart is another way of looking at the market data I provided yesterday. It gives a different perspective of the Australian property market throughout Australia’s major cities.
What I have done is taken the average price of homes and units for a given city as collected from March 2005 to March 2006. I’ve calculated the average gross income a landlord would expect to get over this time period by multiplying the average recorded weekly rental return by the number of weeks in a year, (52). The averaged gross income is then expressed as a percentage of the average cost of purchasing a residential property. This data is assessed for residential homes and units. Neglecting variables such as taxes, duties, maintenance costs and market appreciation, this data is an expression of the value for money of a given investment property in the short term.
The graph clearly shows that in all the cities, residential units provided a better return. In Adelaide, the difference between units and residential homes was marginal. In Sydney, an investment in apartments provided a much better sense of value for money than Sydney housing properties. Overall, there is a general trend that suggests that units are fetching better rental to outlay ratios than houses. So what factors could be driving this trend?
1) There could be a greater demand for unit living in larger cities. Families are getting smaller and as the average age of marriage and child rearing increases singles and couples are more likely to prefer the simplicity of apartment living in a central area.
2) Unit rentals are in short supply. As some of the smaller cities are experiencing growth in local industry and economy more people are moving or staying in the area. Population growth, especially in the business sector is generally associated with a greater demand for apartment style living.
| 55 |
| Vote |
subscribe to this blog
Advertise your property for sale/rent for Free on ZRealEstate.
View Properties : NSW | VIC | QLD | SA | WA | ACT | TAS | NT
Advertise your Properties : NSW | VIC | QLD | SA | WA | ACT | TAS | NT
Advertise your Properties : NSW | VIC | QLD | SA | WA | ACT | TAS | NT
