[Podcast] A bleak outlook for renters is good news for investors with Dr. Andrew Wilson

Australia’s property markets have experienced unprecedented demand over the last couple of years, despite tourists not coming from overseas, despite visa holders not coming, visa holders not coming, students not being here, and the borders being closed.

And now despite the market cooling, rising costs and supply shortages are causing one of the worst housing crises in history.

I don’t know about you, but I’ve been reading about families forced to live out of their cars, in camper vans, and even in tents.

And these are respectable people with reliable incomes and good rental history to boot.

Today I’m going to share a couple of segments to help you understand what’s going on.

First, there’s a replay of one of my recent Property Insider chats with Dr Andrew Wilson where we share his latest rental reports and what we believe is ahead for rental markets.

Then I’m going to share some statistics from the census, including one that created a lot of furore about why there’s a housing crisis when about 10% of properties were vacant on census night.

I will give you some ideas to help you be a better investor.

And of course, I’m going to share my popular mindset message.

What’s going on with renters and the rental market?

• Vacancy rates have dropped to the lowest point nationally since April 2006.
• Capital city rents have risen 15.6% in the last 12 months alone. 
• There are fewer properties on the market and more people looking for rental accommodation at the moment.
• Families are looking at apartment units because that’s all they can afford.
• Household sizes are shrinking.

What the recent census means

The size of Australian households has declined over the past five years, a shift that may have accelerated during the pandemic, increasing demand for housing and sending rents sky-high even as overseas migration fell sharply.

Recently released Census data also reveals that the formation of single-person households has significantly out-paced the creation of one-bedroom homes, a disconnect which shows housing construction is out of step with needs.

In rounded numbers, the average number of people comprising each household has fallen from 2.6 to 2.5 people.

Although the shift appears marginal, it could equate to nearly 200,000 homes.

It’s important to know:

• The number of homes left vacant has actually fallen between census nights.
• The number of homes owned outright has increased by 10%.
• The number of people with mortgages has doubled.
• This suggests that people are using their home’s equity to invest.
• Interest rates have gone up, but so has the value of the property.
• Your income as an investor depends on the ability of your tenants’ to pay higher rents on time.
• This is why it’s important to rent in suburbs where tenants rent because they want to, not because they can’t afford to buy.

Important Money Tips to Teach Your Children

• Today’s debt equals tomorrow’s slavery. Failing to delay gratification leads people into debt traps.
• He who dies with the most toys isn’t the victor. True wealth is what you’re left with if you lose all your possessions.
• Take responsibility, and that will make you the master of your destiny. You are where you are because of the decision you did and did not make.
• Patience and waiting. You can’t have it all right now, you have to work your way up the food chain.
• Luck is made through hard work. Truly successful people do the hard work to get where they are.
• You don’t need millions to achieve financial freedom. Financial freedom is about your relationship to money, not how much you earn.
• Spend less than you earn and invest the rest. Invest at least 10% of earnings and let compounding do the rest.
• Youth doesn’t last forever, so use it wisely. Starting to save and invest early will secure your financial future.

Links and Resources:

Michael Yardney

Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Dr. Andrew Wilson, Chief Economist My Housing Market

Subscribe to our weekly Property Insiders videos – www.PropertyInsiders.info

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Some of our favorite quotes from the show:

“I’m not sure why investors sold up, I guess they’ve been spooked. Because they did what they are meant to do, they went up in value.” – Michael Yardney

“The census was conducted in late August last year when many of us were in lockdown and many of us couldn’t go on vacation, so there were a lot of holiday homes and AirBnB properties left vacant.” –Michael Yardney

“Your future income is going to be very dependent on your tenants’ ability to pay increasing rent over time.” – Michael Yardney

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