In response to increasing median prices the rate of new construction is increasing. As building approvals progressively become building completions, the supply of rental property in Sydney will increase over the next few years.
We expect to see a gradual increase in the vacancy rate in the rental market and a continued slowing in the rate of rental growth. This is perfectly normal in this phase of the market cycle.
This scenario will unfold slowly given the deficit of rental stock that currently exists, however, it is time to start transitioning your property management strategy to defensive mode.
This may include meeting the market to maintain occupancy rather than aggressively seeking to increase rents.
An ongoing collection of thoughts, opinions, observations and recommendations by long time property analyst and commentator Brett Johnson.
Brett has been actively involved in property investment, research and management for over 35 years. He is a passionate advocate of planned, counter-cyclical property investment with a special focus on understanding the behaviour of property markets. He is a regular commentator on property investment and markets in Australia, co-author of The Wealth Power of Property, a licensed real estate agent and Justice of the Peace.