By Chris Shaw<\/p>\n
Limited supply and strong demand have pushed up rents throughout the Australian property market in recent years but a suggestion of a slowdown in the pace of increase for rental growth in the inner city market in Sydney is well off the mark according to BIS Shrapnel.<\/p>\n
The forecasting and industry analyst group has just completed its “Inner Sydney Apartments, 2007-2014” report and come away with the conclusion rents in this market should rise by as much as 29% by 2010 given the underlying supply and demand dynamics.<\/p>\n
While this is good for those already owning investment properties those looking to enter the market may not see such gains shorter-term as the group expects rising interest rates to limit price gains and demand in the shorter-term.<\/p>\n
The Sydney inner city apartment market is essential a split market, the group noting rental demand is being driven by young professionals who want to live closer to where they work. The 2006 census showed 33% of inner city residents in Sydney had moved there to be closer to their place of employment.<\/p>\n
On the other side BIS notes investment demand in the inner city apartment sector is heavily weighted towards owner-occupiers, most of whom are either single or couples with no children. There was a slight increase in favour of owner-occupiers in the period between the previous census in 2001 and the 2006 census, as 35% now own or are paying off their properties as opposed to 33% in 2001.<\/p>\n
The group’s report also shows a move away from new developments, as new completions totalled 2,300 apartments in 2003\/04 but this had fallen to less than 1,000 in 2006\/07 and shows the lack of supply despite demand continuing to increase given higher overseas student numbers and increased numbers of professionals making a move for lifestyle reasons.<\/p>\n
A slight improvement is expected in coming years as BIS is forecasting apartment completions of 1,250 in 2007\/08 and an increase to 1,500 in 2008\/09, but the group points out this won’t be nearly enough to satisfy demand and so rents will continue to move higher for at least the medium-term.<\/p>\n
But interest rate increases mean only limited growth in property values through to 2008\/09 before an acceleration in 2009\/10, with BIS expecting a peak in values around 2011\/12. The owner-occupier side of the market is tipped to do better, the group forecasting total rental growth through to 2012 of 44%, while price growth in the same period is tipped to be 29%.<\/p>\n","protected":false},"excerpt":{"rendered":"
Increased demand from professionals and international students and ongoing supply constraints mean inner Sydney apartment rents will continue to increase according to market forecaster BIS Shrapnel.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[31],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/53976"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=53976"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/53976\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=53976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=53976"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=53976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}