Moment when rents and mortgage outlay are in line has passed: Ewan Morton

This time last month I wrote that we had reached what I called the delicate rental market tipping point. I said it would be fleeting and it appears I was right.

That moment when rents and mortgage outlay are in line has passed.

Figures released over recent weeks highlight house prices in Sydney jumped 2.5% in September with a 10% growth overall so far in 2013. Compare that to figures released by APM yesterday showing average Sydney house price rents haven't moved over the last 12 months and predictions are they will remain stable for much of the year ahead.

That's great news if you're renting. 

For those in the market to buy it is an interesting revelation. It's certainly another reason not to get caught up in talk of the market going gangbusters, and while it might sound gloomy I think investors should factor in a uniform rental return when doing their numbers on the value of a potential rental property. Better to be happily surprised rather than financially squeezed.  

However it is also good to remember that those numbers are the average and there are pockets where rental demand is strong. We manage a large number of properties in and around Pyrmont where demand continues to outstrip supply so rental return is very healthy. If you are a potential investor don't be discouraged but do be discerning.