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Rents rise for 36th consecutive month – It may be cheaper to buy a home!

By September 13, 2023No Comments

Rents continue to increase in many parts of the country, thanks mainly to the strong growth in the unit market.

CoreLogic’s national rental index rose 0.5% in August, which was the 36th consecutive monthly increase. In annual terms, rents rose 9.0%, almost triple the decade average of 3.2%.

As the graphs show, annual unit rents outpaced annual house rents in every capital city – probably due to affordability.

As rents have kept rising, some tenants are likely to have shifted from the dearer house market to the cheaper unit market, leading to more demand for units.

Interest remain on hold.

The Reserve Bank of Australia (RBA) has left the cash rate at 4.10% for the third consecutive month, prompting everyone to wonder: have interest rates peaked?

In a statement announcing the decision, the RBA provided evidence for those who believe the next move in the cash rate will be up and those who believe it will be down.

* Next move up: the RBA said “inflation is still too high” and that “further tightening of monetary policy [i.e. increasing interest rates] may be required to ensure that inflation returns to target [i.e. 2-3%] in a reasonable timeframe”.

* Next move down: the RBA said “higher interest rates are working to establish a more sustainable balance between supply and demand in the economy” and that “recent data are consistent with inflation returning to the 2-3% target range over the forecast horizon”.

In other words, the RBA seems genuinely open to both possibilities.

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