2017: Prices up, rents up, volumes down.
2018: Prices up, rents up, volumes stabilise?
I expect we’ll see volumes stabilise and prices continue to grind higher. Rents will also continue to rise in 2018.
Nothing has fundamentally changed for property investors. The fact remains that property is still an excellent way to create passive income and to build wealth.
And while yes, property values have increased substantially over the past few years, there are still opportunities to buy property that looks after itself. That is, the rent covers the interest and running costs so investors don’t need to top up the mortgage payments while waiting for capital gains to accrue.
I think rents will continue to rise this year as the number of good quality rental properties available for rent remains limited. We had a couple of tenants give notice over the Xmas period and our property managers had no trouble re-tenanting for higher rents with a good selection of quality applicants to chose from. In the past, the Xmas period has often been a tricky time of year to find tenants.
If you look at investment alternatives like the stock market, valuations are very stretched and bank term deposits still only pay around 3%, touching on 4% if you are prepared to tie your funds up for 5 years.
Investing in rental property still stands out as a good bet.
John Kenel, Assured