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Rental yields keep pace with price growth

24 January 2014 Steven Cross

Rising property prices in Brisbane aren’t eating into landlords' yields, according to a senior economist.

Speaking with Residential Property Manager, chief economist for Australian Property Monitors Dr Andrew Wilson said rising prices typically erode rental yields – but not in Brisbane.

“Brisbane investment in houses, not so much units, looks to be something that will induce more investor activity in the Brisbane market,” Dr Wilson claimed.

“Yields are still among the highest of any of the capital cities and we’re seeing a lot of upside to price growth in Brisbane. It is a tight rental market with low vacancy rates, and rents keep rising so the high yields are being maintained in an environment where there’s considerable price growth, which is very interesting for investors.”

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Based in the inner-Brisbane area, top agent from Place Estate Agents Bulimba Paul Curtain agreed that the property market was heating up, but was less enthusiastic about the rental market.

“For the past two years, investor numbers have been thin, but the one thing we noticed last year is investors entering the market,” he said.

“Coupled with lower interest rates, we’re seeing first home buyers being drawn from the rental market into the buying market.

“Because of this surge in investment properties and first timers leaving the rental market, vacancies picked up towards the end of the year – but rents are still on the up regardless.”

Mr Curtain claimed a property listed on Thursday can have 40 groups through by Saturday, with several offers on the table.

“We had the best year ever in 2013, and we’re looking at an even better 2014 at the rate we’re going now,” he said.

Rental yields keep pace with price growth
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