Surging unit rents spark interest in property purchase opportunities

WITH DANIEL WALSH AND LEIGH DELEDIO FROM UFINANCIAL

As the rental shortage continues to much of the state, renters are feeling the squeeze like never before, with unit rents across Greater Geelong tipped to soar by almost 25 per cent in the region this year.

This alarming forecast comes as new analysis paints a bleak picture for tenants, suggesting that some suburbs could witness rent hikes of up to $100 a week for units by the end of the year.

The housing market in Geelong and its surrounding areas has been experiencing unprecedented growth, driven by a combination of factors including low interest rates, high demand, and limited supply.

Particular suburbs such as Armstrong Creek, are expected to see unit rents jump by 20 per cent, equivalent to a staggering $93 increase per week.

With 1,200 renters actively scouring online portals for available properties across Torquay and the Surf Coast, the demand vastly outweighs the supply, with just 90 properties available for rent in the past month.

This significant supply-demand imbalance is exerting immense pressure on rental prices, leaving many tenants struggling to afford housing.

Amid this rental crisis, experts are urging renters to consider the advantages of transitioning into the property market.

While renting may offer temporary flexibility, the long-term financial benefits of homeownership cannot be overstated.

One of the key arguments in favour of buying is the stark contrast between mortgage repayments and rental repayments.

Based on an LVR of 80 per cent on a home purchase of $550,000, mortgage repayments can be comparable to or even lower than rental payments.

For first home buyers, recently dubbed an affordable choice for entry-level homes, Belmont has a median unit sale price of $532,000, and Geelong West at $500,000, which has seen 17.4 per cent growth in 12 months.

Purchasing a property provides the opportunity for capital gains, allowing homeowners to build equity overtime.

As property values continue to appreciate, homeowners stand to benefit from significant returns on their investment, providing financial security and stability for the future.

In light of these factors, renters in all parts of the state are encouraged to look at their options carefully and explore the possibility of homeownership.

While the rental market may be experiencing unprecedented challenges, taking steps towards property ownership can offer a pathway to financial freedom and security in the face of uncertain times.

To speak to a UFinancial mortgage broker to assess your options or check your borrowing capacity, head to loantools.com.au/ufinancial