It has to be a good time to buy investment property, with everyone talking about Australia's rental crisis and figures showing little sign of a recovery in the near future.
Data released this week by the Australian Bureau of Statistics ABS for November, 2006 shows a slight rise in seasonally adjusted investment lending over the month, up 1.8 per cent to $5.44 billion.
HIA's Executive Director of Housing and Economics, Simon Tennent, said that it is sobering to think that, on average, $5.6 billion worth of rental properties were added to the stock in the 6 months to July 2006 yet vacancy rates fell in Sydney, Melbourne and Brisbane.
Between June and September 2006, vacancy rates fell in all capital cities except Perth.
"With lending now stuck at around $5.4 billion per month, there is little doubt that the pool of available properties will continue to shrink throughout 2007", Mr Tennent said.
"And it's not just renters who will feel the heat as the reliance on government funded private rental assistance also looks set to skyrocket with the REIA reporting rent increases over the past 12 months as high as 9.8 per cent.
"The value of bond loans and ongoing rental subsidies is likely to become a bigger drain on government finances and sadly these measures hardly bridge the gap between long term renting and making the leap into home ownership", he added.
"Moreover, the first home owner's grant has been eroded to the point that it doesn't even cover stamp duty in 5 of Australia's 8 states and territories, despite additional concessions for first home buyers."
"With government's retreating from the provision of public housing stock and the increasing reliance on mum and dad investors to house Australia's growing numbers of renters, urgent action needs to be taken to ease the pressure on rents by making property investment more attractive", Mr Tennent said.
