More and more first home buyers are facing a vicious circle of rising rents, rising house prices and rising interest rates which will keep them stuck in the rental trap for some time yet.
Putting all this together makes it harder for young families to save a deposit and all this means that housing affordability is likely to come back as a major issue over the next year.
Their confidence is likely to be further shaken with interest rates predicted to increase by a further one percent over 2011.
This means there will be more Gen Y tenants over the next few years and while some will want to go to the outer suburbs, most will choose to rent apartments close to the lifestyle locations and close to the CBD. With little new rental stock coming on line in these locations, it is likely that rents will rise strongly in these locations in 2011.
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