Look at these forces at play:
Immigrant work permits increased.
Property supply decreased.
It does not take a genius to work out that if there is more demand on cheap housing and there is a lack of cheap housing coming on to the market for rent that the inevitable will happen:
Rental prices will RISE
So as everyone talks about big property losses and how bad it is for us property investors because of negative equity (do we really care?) they miss the most basic economic force at play that:
Potential profits are massive!
This is because property prices are lower, rents are higher and interest rates are lower. In my book that means happy days. Now before you shout out “I cannot get finance!” think again.
My clients are happily getting mortgage offers. We are completing on 10+ deals a week at very attractive prices. The funny thing is by the time the property completes rents have risen so the yields are even better than we first stated.
If you are not yet convinced have a proper surf around on the internet. Have a look at how building quotas will not be met for the next 5 years as this government let the housebuilding industry collapse around them (which is great for us in the short term but essentially creates the boom bust cycle), how demand for low value small properties is growing massively because of demographics and the way people live and the fact that first time buyers face extreme difficulty on getting on to the property ladder as they need massive deposits (little do they know about no money down schemes!).