Brisbane rents increasing faster than capital growth on homes

It is comparatively almost worth your while buying a home rather than renting due to a rapid increase in rental growth, according to leading Brisbane Property Investment Consultants, Grow Consulting Group.

Managing Director of Grow Consulting Group, Ayda Shabanzadeh, said capital growth on homes is remaining comparatively consistent, while the cost of rent has strengthened since the end of last year and will continue to climb throughout the remainder of 2011.

"Property values and rental values typically have an interesting interconnected relationship, whereby house values will increase and then remain consistent, during which time rental prices increase. As rental prices come close to the weekly cost of a mortgage, property value will climb again to put some distance between the value of homes and rentals," she said.

"Right at this moment, it is property investors and first home buyers who are set to reap the benefits of the current situation. First home buyers can spend slightly more than their weekly rent to own a home, and property investors will score on the comparatively higher rents, helping them to pay off their mortgage on the investment faster."

Ms Shabanzadeh said that the higher rents were likely a result of increased demand for rentals, coming about due to a drop in first home buyers over the past year.

"The numbers of first home buyers have dropped dramatically, probably as a result of slightly higher interest rates and the conclusion of the boosted First Home Owners Grant last year."

According to Ms Shabanzadeh, recent RP Data figures showed Brisbane posted the strongest growth in rents for units, with the median up 2.9% to $360.

"In our Property Management division, we have experienced an increased number of longer tenancy renewals," she said.

"Previously, tenants were reluctant to sign for a year's tenancy, but now, almost as though they are aware of a decreased availability of desirable rental homes, and want to hold onto the property, property manager, and rent they have managed to land."

Ms Shabanzadeh said that these figures indicate that now is the ideal time for property investors to enter the market, or build on their existing portfolio.

As investors themselves, Grow Consulting Group are passionate Property Investment Consultants, who assist their clients by sharing their expertise and knowledge, and offering services in three core business areas - finance, property investment and property management.  An intricate understanding of the property market in South-East Queensland and its changing dynamics, together with partnerships with experts including real estate agents, developers, accountants, quantity surveyors, insurance consultants ensure an exceptional service is provided to time-poor investors.