What are the factors that affect the Property Rental Market?

Posted under General by Michael

Affordability
Today is the scenario where lots of people are renting property on lease as property prices continues to rise. With current market, the situation of first time buyers has been adversely affected.

Interest Rates
Another important factor, which contributes to the number of the people in the rental market, is interest rates. You will wonder how this affects the rental market. But it does. Higher or lower interest rates make huge impact on the rental market. Let us take a scenario which will help us understand better how interest rates affect the rental market

When interest rates are increased the first person to suffer is the landlord as mortgage values of property will rise (unless it on fixed rate) rental values can increase, depending on how high the interest rate are. It can lead to an increase in the number of people selling property because of increase in the mortgage payment.

Supply and Demand
Supply and demand plays an important role in how the market performs. There should be balance in both demand and supply as too much demand will affect supply and vice- versa. Same is the case with rental market. Increase in the houses available for rent would decreases the rent and if there is shortage of homes there would be a great hike in the rentals. So both these factors are inter-dependent on each other.