The recent deflationary trend of the Australian economy is likely to place rental returns under pressure.
The Australian economy has had a negative read on the CP index for the first time in eight years.
According to a recent article in the Australian Financial Review, this issue, coupled with the China-fuelled apartment boom in capital cities, means that rents will struggle to be as high as they have over the past eight years.
The article went on to say that there was currently a move away from CPI indexed rents in light of these issues. However Aspire will continue to implement CPI increases in our rental contracts, whenever possible.
Deflation has a negative impact on any economy. If the trend continues over the next few months, vacancy rates could increase as a result of more aggressively priced competition.
“Sometimes only a small adjustment in price is needed to trigger a greater level of interest from prospective tenants”
Owners can rest assured Aspire agents are abreast of all of the key issues affecting the rental market. We are here to guide owners and advise on pricing to best position a property to be rented.
“Sometimes only a small adjustment in price is needed to trigger a greater level of interest from prospective tenants”, says Aspire Property Manager, Debbie Cassar.
“That small reduction in rent can mean that difference between getting a quality tenant over the line In the long run that can mean very little or no loss to the owner, as lower vacancy timeframes means more rent returns,” says Debbie.
Aspire uses state-of-the-art data analysis and in-depth industry experience to appraise rental values and advise clients accordingly.
Please contact us today if you wish to discuss any aspect of your current appraisal or lease agreement.