Residential rents are forecast to rise further in 2024 as vacancy remains at record or near record lows, CBRE has forecast.

CBRE’s Residential Figures Q4 report suggested continued growth in the rental market, namely down to a mix of large immigration numbers and supply shortages.

Rents are already at record highs, according to the data collected by CBRE, REIA and SQM Research, while vacancy rates are touching record lows across the country.

<img alt="CBRE vacancy rate" data-entity-type="file" data-entity-uuid="4dd80446-bb1f-4143-99d1-4f73a2efac76" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202023-12-19%20at%207.39.30%20pm.png?VersionId=xfaN82dYkgTx8G1BLJszU3vYZcg7cs8x" />

"Substantial rental growth has continued across most markets, approaching 30% year-on-year in some cases," CBRE's report noted.

"The surge in net overseas migration has had a significant impact on Australia's residential markets, particularly rental markets which were already feeling the effects of tapering supply pipelines."

CBRE said that while the recently released migration strategy has highlighted measure to reign in the net overseas migration figure, the three-year projection of 1.135 million to FY25 still translates into demand for around 450,000 new dwellings. Adding in demand for natural increase, new dwelling demand over the next three years will likely exceed 600,000.

Completions of both houses and units in FY23 totalled a little under 175,000.

<img alt="CBRE" data-entity-type="file" data-entity-uuid="2b08a5e7-445e-401a-b00c-4a72768559a1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202023-12-19%20at%208.56.07%20pm.png?VersionId=bDVRANTjdPTl5m19ttJkgW8IYuN3G2qX" />

"With the pipeline slowing further, this suggests new supply will not keep pace with the demand generated, indicating little relief from the tight rental markets for the near future.

"As a result, rents generally will continue to increase above CPI, although the pace of growth will ease as affordability pressures bite and alternatives such as increased share-accomodation or younger people remaining at/returning home become more common."

Completions of both houses and units in FY23 totalled a little under 175,000, well shy of the estimated 600,000 needed to keep up with immigration

Joel Robinson

Residential investors on alert as rents set to continue to rise: CBRE

Sunshine Coast developer Habitat's recently launched apartment development, St Clair in Birtinya, is attracting both local and interstate investor interest due to&nbsp;the robust infrastructure pipeline in the area and anticipated population boom in population in the Sunshine Coast region.

Birtinya, which neighbours Bokarina and Wurtulla, will become a main attraction for the Sunshine Coast and have significant transport links as part of the government's $10 billion infrastructure pipeline.

The government's light rail project, connecting the Maroochydore CBD with Caloundra, will pass through Birtinya and the $3.2 billion, 37-kilometre rail extension between Beerwah &amp; Maroochydore.

[smartcode_project:default project_id=108399 project_image_fid=232439]

Further infrastructure upgrades in the region include the Sunshine Coast Airport expansion of the 5.6-hectare greenfield Maroochydore CBD, which will contribute $4.4 billion to the economy, and the $3.2 billion investment in the Sunshine Coast Health Precinct.

All of the infrastructure—the expansion of the Sunshine Coast Airport, the light and heavy rail extension project, solar farm, submarine cables, injection on the Sunshine Coast health precinct, and a new USC University campus—will create over 100,000 jobs for the region which is already booming more than some of Australia's capital cities.

The GDP of the Sunshine Coast is $24 billion a year, which surpasses Adelaide's, Canberra's, and Darwin's GDP. Sunshine Coast's economic growth is expected to reach $33 billion by 2033.

[smartcode_project:default project_id=108399 project_image_fid=232440]

Sunshine Coast has evolved beyond its initial small-town status, indicating significant potential for growth and an attractive investment opportunity.

The transformation into a larger city, coupled with unprecedented factors, is expected to lead to a substantial economic expansion, potentially more than doubling in size within the next 15 years.

Despite the positive outlook, challenges such as record-low unemployment and persistent population growth highlight an increasing demand for housing on the Sunshine Coast. These challenges are further intensified by a growing shortage of available dwellings, creating a critical opportunity for astute investors to capitalise on the favourable conditions anticipated.

[smartcode_project:default project_id=108399 project_image_fid=230354]

According to Bis Oxford Economics, solid population growth, combined with supply-side challenges, is expected to result in the undersupply of dwellings on the Sunshine Coast rising from 3,900 dwellings in FY2023 to approximately 4,800 dwellings in FY2027.

Investors at St Clair, two adjoining buildings on the water, can expect to secure tenants anywhere between $600 to $680 a week for the two-bedroom apartments, which would reflect a rental yield of around four per cent. They start from $749,900.

The three-bedroom apartments, priced from $869,900, could see yields at comfortably over four per cent if they secured a tenant at the lower end of the $700 to $900 a week forecast. At closer to $900 a week, that yield&nbsp; jumps to nearly 5.5 per cent.

[smartcode_project:default project_id=108399 project_image_fid=230765]

The $150 million development, KArchitecture-designed St Clair, on two side-by-side blocks on Waterfront Retreat, will comprise two eight-level residential towers with 200 two, three and four-bedroom apartments.

There will be a maximum of 13 apartments on each level. Some large penthouse apartments will have over 50 sqm of outdoor space, while a handful of courtyard apartments will have around 90 metres of gardens.

A 25-metre resort-style lap pool is on the ground level, featuring a five-metre shallow wading entry adjacent to a BBQ pavilion. A residents' 16-seat dining room with a private outdoor terrace complements the pool for social gatherings.&nbsp;

[smartcode_project:default project_id=108399 project_image_fid=230355]

Crowning St Clair is a communal rooftop terrace enveloped by lush subtropical landscaping by Place Design Group, with an outdoor kitchen and BBQ facilities. The rooftop deck faces Bokarina Beach towards the east, while the lounge overlooks the hinterland to the west.

Additional amenities and services include an outdoor beach shower, dog wash facilities, parcel locker storage, and professional property management.

Builder developer Habitat, who are currently building The Corso in Maroochydore where they are also seeing significant interest from Sydney investors, has fast tracked construction due to strong sales.

Habitat Construction is estimating completion of St Clair in Q1 2026.

[smartcode_project_cta:default project_id=108399]

The GDP of the Sunshine Coast is $24 billion a year, which surpasses Adelaide's, Canberra's, and Darwin's GDP

Why Birtinya's newest off the plan apartment development St Clair stacks up for investors

Western Australia has become the epicentre of property investing in Australia.

That's the view of&nbsp;Mike Mortlock, managing director of MCG Quantity Surveyors, who has seen remote investing accelerate in 2023, namely due to the significant investment made in the Western Australian property market.

The company’s latest analysis of their client data showed the average distance between where landlords live and where they invest has reached a staggering 1502 kilometres to date in 2023.

“This is a substantial uptick on last year’s result and shows that buyers are incredibly mobile when it comes to securing a desirable property investment," Mortlock says.

This year’s outcome is a near doubling of the same analysis in 2022 which showed an average of 857 kilometres between a landlord’s home and investment.

It’s been an ongoing theme according to the numbers. To the end of 2021, the distance was 559 kilometres. Before that in pre-pandemic times, the remote investing distance was 294 kilometres to January 2020.

Mortlock says WA is now considered among the nation's most investor-friendly jurisdictions.

"There's little doubt its popularity with real estate buyers from the east coast has increased the gap between home and investment," Mortlock says.

“Western Australia, and more specifically Perth, has seen a substantial uptick in investor participation. Price is a factor as some big capital city markets are now beyond the reach of everyday buyers. Our analysis shows the average price an investor pays for a property is approximately $615,000. That amount will go a lot further in Perth than it will in Sydney or Melbourne."

That investor interest is only likely to be heightened by the announcement of <a href="/new-townhouses/burswood-point-saintly-entrance-burswood">Burswood Point</a>, the $3.8 billion masterplanned <a href="/new-apartments/burswood-wa-6100">Burswood</a> precinct by developer Golden Sedayu.

[smartcode_project:default project_id=142314 project_image_fid=228355]

The mega project, which will transform the peninsula with 4,500 homes and apartments as well as office and retail space, is expected to be a hit with both local, interstate, and overseas investors who are looking to take advantage of the rarity of such a project at its earliest stage.

The project is set to inject more than $10 billion into the state’s economy and generate 25,700 West Australian jobs over the next 10 years.

[smartcode_project:default project_id=142314 project_image_fid=228353]

Managing Director of Golden Sedayu Andrew Sugiaputra said after years of careful planning, he was thrilled to reveal their vision for this city-defining project.

“At 38 hectares, <a href="/new-townhouses/burswood-point-saintly-entrance-burswood">Burswood Point </a>is one of the largest urban development projects ever undertaken in Australia, and certainly the most ambitious mixed-use redevelopment currently underway in Perth,” Sugiaputra said.

“With its dress circle position across from the Perth CBD, Burswood Point is set to become a destination in its own right – home to a range of premium tourism and recreational facilities, including markets, riverside parks, a shopping centre and luxury hotel."

Golden Sedayu are currently taking early enquiry on the project, which will see the first homes and apartments go on sale early next year.

[smartcode_project_cta:default project_id=142314]

Investor interest is only likely to be heightened by the announcement of Burswood Point, the $3.8 billion masterplanned precinct by developer Golden Sedayu

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