What are the pros and cons of investing in a commercial property?
What are the pros and cons of investing in a commercial property? Read on to learn more. ...
While there’s been speculation as to whether new building stimulus measures could lead to increased rental supply in the medium-term, a property expert believes that it will ultimately have minimal impact on the established rental market.
Chairman of Momentum Wealth’s residential investment committee Emma Everett said that the established rental markets will continue to benefit from tighter stock levels.
While some investors may leverage the state grants to build or develop, these stimulus measures are primarily aimed at owner-occupier and first home buyer markets, according to her.
“We’re not anticipating a huge influx in rental stock, particularly in suburbs that are already tightly held,” she said.
"Even for the small segment of tenants looking to build their own property in future, their exit from the rental market will still be delayed due to the lag in construction, and the overall impact will likely be minimal.”
According to Ms Everett, areas with the capacity for high volumes of building activity, such as those zoned for high-density dwellings and outlying greenfield development areas, would be most impacted by the changes.
Further, more apartment supply is expected to come on stream as development projects get underway due to increased off-the-plan activity, which will also have the largest impact on those higher-zoned areas such as’s inner city.
“Likewise, we’re already hearing reports of higher demand for vacant lots in Perth’s outer – suburban housing estates, so investors holding existing properties in these locations may well find themselves facing increased rental competition once these dwellings reach completion,” she said.
Ms Everett strongly encouraged active monitoring of the market and getting the right advice on adapting rental strategies to align with local conditions will be key for owners.