The Reserve Bank of Australia (RBA) has decided to put a pause on rising interest rates, leading many to believe the domino effect of this decision will cause an easing of wild rent increases from 2024. If any of what I just wrote made not a lick of sense, allow me to explain it all in a simpler way.
So what’s the tea? Well, property research firm CoreLogic has come forward to let us know that all of these barbaric rent increases we’re facing will calm down in 2024. There’s no real exact timeframe for this cooling period, but it’s exciting news nonetheless.
The reason CoreLogic reckons that’ll happen is because the RBA had a big ol’ meeting about interest rates on Tuesday, and just released the minutes from their little gathering, which hint quite heavily at the direction we’re headed as a country.
Basically, the RBA big-wigs decided to keep interest rates on hold at 4.1 per cent. This is good news for the property owners among us because it means they won’t have to pay more interest on their home loans.
Keep in mind there have been 12 rises in the last 15 months, which is quite wild, and also one of the reasons landlords are increasing your rent. Why would they fork out the extra money that they owe the banks when they can make you pay it instead? It’s essentially a case of one person getting fucked over and deciding to fuck others over in response. An endless cycle of mess!
So the RBA will be chilling for a bit, and this has excited people.
“There are multiple reasons [interest rates and rents] might move together,” CoreLogic Head of Research Eliza Owen told the ABC.
“For one, rents are an input in measuring inflation. When rents rise, inflation can rise, and this prompts the RBA to lift interest rates.
“Secondly, interest rates can impact rent. Higher interest rates mean investment property becomes less attractive, which could slow the delivery of new rental stock coming to market, and this could push rents higher.”
Interest rates go up, rents go up, inflation goes up, cost of living goes up. But if interest rates are stagnant or potentially decrease, we’re living the dream baby!!!!!!! (the dream right now is slightly lower rents please God we are SUFFERING out here).
According to Owen, there are actually four main factors that could contribute to rental growth slowing down in 2024.
Hey, I’ll take four factors over none!
The factors are:
- Rental demand reducing due to rent being so unaffordable that folks return to share housing (thus costs decrease because there’s less demand).
- More homes being completed, leading to people exiting the rental market and buying, decreasing demand.
- Government community housing initiatives becoming available, decreasing demand.
- Investors returning to the housing market, decreasing, you guessed it, demand for rentals.
And that’s everything you need to know about rent increases in Australia! Hopefully this forecast brings us a glorious rain in 2024.
Until then, happy rent increases!
