Market update

Thursday, July 01, 2010

According to Mortgage Choice, the cost of renting is edging closer to the comparable repayments made by borrowers on a mortgage. The median monthly rent in the March quarter for an apartment in Sydney was $1,777, for Darwin it was $1,681 and Brisbane and Perth stood at $1,517. Melbourne was at $1,473, Hobart $1,170 and Adelaide $1,127.

In comparison, a 30-year $300,000 home loan at 7% costs $1,996 per month in repayments, with additional costs such as land tax/strata fees, council rates, maintenance and water which need to be considered. While housing affordability has been falling, this similarity in cost between monthly rent and loan repayments is an encouraging reason to make a property purchase.

Rents are also on the increase across the country and the undersupply of rental housing looks set to continue, providing even more incentive to put a property purchase plan in action.

As the climate of uncertainty escalates in the business world and real estate markets around the country continue to tighten up, we are seeing increased interest in the One Agency business model.

The low cost of establishing a One Agency office gives agents an opportunity to conduct business more affordably and the wherewithal to run their own show where typical franchise set-ups may be financially prohibitive.

The attractively low set-up and operating costs and the established marketing material and online presence mean more opportunity for success and less risk. This, of course, is an economical way of running a business and an extremely attractive option for anyone considering launching their own agency in a challenging market.

- Paul Davies, Managing Director

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