Property investors can hit the ground running in 2010 with the news that rents are predicted to keep rising around the nation.


Economic forecaster, BIS Shrapnel, is anticipating rental growth to increase by an average of 5.8 per cent a year over the next three years. This increase would result in landlords pocketing an extra $1.9 billion in rents between 2010 and 2012.

Climbing interest rates and a winding back of the first home buyers grant boost are believed to have contributed to more people staying in the rental market. Other factors include record low levels of property construction and a strong demand for housing amid a growing population, according to the BIS Shrapnel Residential Property Prospects report.

Investors looking for an immediate return on their investment are expected to flock to Sydney, where the highest annual average rent increases are anticipated at 7.1 per cent. Rental growth is also expected to be strong in Melbourne (5.6 per cent) and Brisbane (5.0 per cent), while Adelaide (3.4 per cent) and Perth (3.2 per cent) will experience more moderate growth.

So which suburbs have the highest rental yields? A list of the top five areas with best rental growth compiled by rpdata.com was dominated by areas in capital cities, with a mix from high priced and low priced suburbs.

If we could place bets on interest rate movements, the odds would be firmly stacked in favour of more rate rises over the coming year.


Of course we can't take bets, but we can tell you what the experts are predicting. A recent survey of 17 economists by Australian Associated Press found that all believed interest rates would now keep moving upward, spelling the end of near 50-year lows. The survey's median forecast for where Reserve Bank interest rates will be sitting mid 2010 was 4.25 per cent.

These predictions are backed up by an Access Economics business outlook report, which says that interest rates will be raised in 2010 and 2011, returning to around 5 per cent in two years.

Access Economics Director Chris Richardson explains this isn't all bad news: as the better things get with the economy, the more interest rates need to rise.

"They dropped to emergency lows when things were at their worst. They keep rising from here. Normally they are about two percentage points higher than they are today. Chances are, we will get back there by the first half of 2011," he says.

The recent positive flow of economic data, including lower than expected unemployment figures, indicates economic recovery is underway. Australia has weathered the storm much better than expected - and we can be proud of our status as the first of the developed nations to move interest rates upwards following the global financial crisis, reflecting our strengthening economy.

How quickly will rates rise?

While there is disagreement among the economists as to the pace and size of interest rate movements, most expect the cash rate to remain low enough to support the economy until the end of the year.

"That means fairly steady rate rises from now. Not too much all at once and the Reserve Bank knows that we sail through this crisis on the back of stimulus. It won't raise rates too fast but it will raise them steadily from here," says Richardson.

With slow and steady the catch-cry for interest rate rises over the next two years, now is the time to consolidate and build on your financial position. As your mortgage broker we can assist with your financial lending needs in the changing economic climate.

George Eliot's inspirational quote 'It's never too late to be what you might have become' is a great way to start off your new year in the right frame of mind.


Regardless of what type of year 2009 has been, the dawn of 2010 represents a perfect opportunity for each of us to make a fresh start, repair on our mistakes and build on our success.

To set New Year's resolutions which will last, ensure you are realistic about what you want to accomplish. If your goals are too demanding, vague or irrelevant, chances are you will find it too easy to become side-tracked or give-up.

Set a definite time frame for each goal and place this information in a prominent place, enabling you to keep track of your progress throughout the year. Ask your partner and/or family to encourage you all the way and have a friend hold you accountable.

Expect that your plans may change according to the challenges that life throws at you, but don't let this derail your efforts. Resolutions are accomplished with a hundred tiny actions that happen throughout the year, so each day approach your goal with a fresh certainty that you will make it happen.

Remember it's never too late to make a change for the better. Today is the starting point for the rest of your life.

Top 10 Resolutions
To start your new year in the right direction, why not begin with these worthy resolutions. Next to each one write down your specific, measurable resolution, as well as the steps and time frame to achieve it.

• Spend time with your family
• Look after your health
• Fit in fitness
• Get out of debt
• Build a nest egg - we can help you take advantage of investment opportunities, give us a call!
• Learn something new
• Help others
• Help the environment
• Get organised - we can help you organise your home loan, give us a call!
• Slow down