Rent or buy? Not all Australians get to choose
A new report reveals a tight rental market putting further pressure on available housing
A new report reveals a tight rental market putting further pressure on available housing
Demand for rental properties in Australian capital cities continues to outstrip supply, with no relief in sight for householders who are still locked out of buying a home, a new report has shown.
PropTrack’s December 2022 Rental Report, released today, reveals rents went up by 6.7 percent last year, a further increase from the 4.7 percent rise in 2021. The national median advertised rent for 2022 was $480 a week.
Despite the increases, the report authored by PropTrack’s director of economic research Cameron Kusher, says this has not led to more renters moving across to home ownership, nor has it caused more investors to enter the market.
This is predicted to create further pressure for renters this year.
“There remains an immense need for more rental accommodation, particularly in the major capital cities where demand is well in excess of supply,” the report says.
“It’s critical that we find ways to create more supply – either through increased investment or more build- to-rent projects – or we reduce demand, which seems unlikely.”
The report notes that it is still generally much cheaper to rent than to pay off a mortgage.
“This indicates that transitioning to home ownership from renting is likely to remain a challenge for many,” the report says.
There were seven consecutive interest rate increases during 2022, with the cash rate increasing from 0.10 percent to 3.10 percent.
For investors, the report notes that both property prices and yields increased over the pandemic, although yields decreased slightly towards the end of last year. Gross rental yields in capital cities fell from 3.8 percent in December 2021 to 3.7 percent in December 2022. In regional areas, yields went from 5 percent to 4.5 percent over the same period.
Data also revealed that units may represent a better investment right now, with house yields falling from 3.8 percent in December 2021 to 3.5 percent in December 2022. For units, yields increased from 4.1 percent to 4.3 percent over the same period, the highest levels since April 2021.
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The company is best known for its prestigious Penfolds brand
Australia’s Treasury Wine Estates admitted defeat in its effort to divest brands including Wolf Blass and Blossom Hill, moderating its annual earnings guidance amid weaker sales of its cheaper products.
Last year, Treasury outlined plans to offload its so-called commercial portfolio in a pivot toward costlier, higher-margin brands. As part of the move, it bought California’s Frank Family Vineyards in 2021 and Daou Vineyards in 2023 in deals worth US$1.31 billion combined.
On Thursday, Treasury told investors that it had failed to find a buyer for its budget brands.
“TWE has concluded that the offers received for these brands did not represent compelling value and therefore their retention is the best course of action,” Treasury said.
The company, which is best known for its prestigious Penfolds brand, said that demand for brands typically retailing for less than US$19 a bottle had fallen by 4.9% in the December-half. That includes the commercial portfolio, which comprises the company’s cheapest offerings.
As a result, Treasury expects so-called Ebits—earnings before interest, tax and other impacts including one-off items—for the full fiscal year of 780 million Australian dollars, or about US$489.8 million. That’s at the bottom end of its previously issued A$780 million-A$810 million guidance range.
Even so, Treasury on Thursday reported a A$220.9 million net profit for its fiscal first half, up 33% on year as the company continued to re-establish its Penfolds brand in China following that country’s removal of tariffs on Australian wine.
Revenue rose by 20% to A$1.57 billion, while profit increased 33% to A$239.6 million once material items and currency moves were stripped out.
The average analyst forecast had been for a net profit of A$242.1 million from revenue of A$1.57 billion, according to data compiled by Visible Alpha. Treasury reported first-half Ebits of A$391.4 million.
The board declared a dividend of 20 Australian cents a share, up from 17 cents a year earlier.
This stylish family home combines a classic palette and finishes with a flexible floorplan
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.