Investors cannot ignore improved rents

The second half of 2007 has seen a surge in interest from investors in the property market the managing director of LJ Hooker, Warren McCarthy, has told a Real Estate Institute forum. "We are seeing state-to-state investors returning as a result of them hedging and looking for stable environments," he said. The Australian Property Institute's NSW president, Tom Webster, said that low vacancy rates, subdued construction levels and rising interest rates will all put pressure on rents through 2008. He said that this combination of factors should be ringing alarm bells in government as families on tight budgets are already under pressure and finding it difficult to keep up with rent increases that have occurred because of previous rate rises. Economist at CommSec, Craig James, said that it will be hard for investors to ignore the fastest growth in rents in the past 19 years.

Source: The Australian Financial Review