New figures from Australian Property Monitors show rental prices rose 2.2% in the December quarter. However Mathew Bell of APM forecasts that the healthier economy, rising interest rates, and increased land taxes would combine to cause rents to increase at a faster rate in 2010. "Sydney rents are likely to increase by at least double the 2009 rate."
Supporting that forecast, Brian Redican of Macquarie Group said that first home buyers in 2009 took demand out of the rental market, but that will change this year.
It is worth remembering that rents were rising at an average 12% a year in 2007 and 2008, before the GFT bit. Through 2009 investor landlords were holding back waiting to see how the financial crisis worked out, but now it seems clear that confidence in the future is back.
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