Rental rates on the rise

A healthy economy and higher interest rates could spark steep rent increases.

According to a report in the Sydney Morning Herald, AMP economist Matthew Bell stated: "It is clear that in 2009 rents were generally kept in a holding pattern as landlords and the market waited to see the end of the global financial crisis".

Figures from Australian Property Monitors revealed that house and apartment rents in Sydney increased by 2.2% and 2.4% respectively.

Bell predicted that Sydney rents would at least double the 2009 rate of 2.2% to approach the $500 per week level for houses.

Rents were kept down in 2009 by increases in the number of first home buyers who were exiting the rental market. However, the end of the first home buyer grants will put greater pressure on the rental market in 2010.