AUSTRALIA’S REAL ESTATE AND DEVELOPMENT AGENCY is advising businesses to avoid spending big on rent while trying to save for a down payment.
In its latest Mortgage Guide, the Australian Property Institute (API) said rental prices are set to fall for the first time in more than three years, but it’s not all doom and gloom.
Its chief economist, Andrew Forrest, said a number of factors could make it difficult for owners to stay afloat.
He said many businesses will face more of an economic downturn, with a drop in wages, lower investment and a rise in energy costs.
“There’s a number factors that are at play, some of which are beyond the control of the property owner,” Mr Forrest said.
Forbes has ranked Australia’s rental market as one of the best performing in the world.
A number of housing market trends are expected to cause price drops in the coming months, with the API warning people to prepare for an overall price drop of 15 per cent over the next 12 months.
API chief economist Andrew Forrest said rental property is set to rise in Australia.
It’s still going to be a great year for property in Australia, he said.
“We’ll be seeing a huge jump in rental rates, we’ll be experiencing a big boom in apartment construction, we’re going to see a lot of interest in commercial property, we may see a slight slowdown in residential construction.”
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Mr Forrest said it’s important for buyers to understand how much they’re investing, so they know how much it will cost them.
“The key thing is to understand what you’re paying, what you need to pay and when you need the money,” he said