In all the major cities in Australia, the demand for rental properties is extremely high. A friend of mine arrived 10 minutes late for viewing a rental property - by the time he got there, the property was already taken. One would think that in such an environment the Landlords must be laughing all the way to the bank. The reality though is a bit different. Any Landlord would be happy when there is so much demand for his property but in terms of yield that he is getting from his rental property, the story is a bit different.

Australian Property Monitors released a new report in July 2008, which shows the growth in rents and the rental yields across all major cities (See the tales below). The below information has been obtained from the Australian Property Monitors website. You will notice how the rents have been increasing for the past 12 months - good increases across all major cities. Good news so far. But take a look at the Gross Rental Yields. Thanks to the official and unofficial interest rates, landlords are paying upwards of 9% interest on the mortgage for these rental properties but the yields are currently half of what they are paying. The high purchase price of the properties is the main culprit here.

The 12 Month % Change in the below tables is the rise in ‘weekly asking rents’.

This post has not been written to put you off property investment. I am just reporting on the latest research released - Thats all. Plus with all the media coverage about rising rents, I wanted to focus on where the landlords are standing.

If you are a landlord and your rental property has not had a rent rise for some time then may be its time to speak to your agent. Do some research on the rents in your local area. And then take appropriate action - But you don’t want to get too greedy though.

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