More tenants in the future as first home buyers get stuck in the rent trap

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.

About Michael Yardney

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au