I have BBC news in the place I am currently staying in and heard a report that Australian housing prices are on the increase again. There is currently a shortfall in rental properties in the major cities.

I just recently increased the rent on my apartment to $10 a week. It is the first increase in rent in a number of years. I still think the rent is under market value, but the tenant I currently have has been there for at least three years now, and has been fantastic.

The increase in rent values has brought investors back in the market, thus pushing up prices. This of course means that an increase in inflation is going to put pressure for the Reserve Bank to increase interest rates.

It’s a pretty vicious cycle, but the overall effect can only be good for existing property owners.

Correction: Yes, that’s a $10 week increase in rent. Not a great deal, but it is an extra $500 a year in income. I wrote that post just after eating a delicious Sri Lankan curry. The food was good, but I was thinking I need to get back to my guest house pretty quick.