Rental squeeze spreads to suburbs

After a weekend of foraging, thousands of people around the country are waiting nervously tonight to find out if they've been approved for a rental property. Most will be disappointed, in what has been described as the tightest rental market since World War II. Today there's yet more evidence of the depth of the crisis, with more to come, after analysts BIS Shrapnel predicted apartment rents in Sydney will rise by more than 40 per cent over the next five years. The squeeze appears to be spreading beyond the inner cities to the outer suburbs, with stories emerging of the staggering lengths to which people are prepared to go to secure a lease. Ben Knight reports. BEN KNIGHT: It's Saturday morning, and the race is on. Each week, the queues of people looking through rental properties are growing longer.
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Inflation clues in lending

A SURGE in lending to property investors spurred on by strong employment levels and rising rental values is another indication that inflationary pressures may be building up in the economy.
However, economists and analysts say interest rates are likely to stay on hold at 6.25 per cent until the end of the year.
For a second consecutive month, home-loan approvals grew -- but below the expectations of economists. The 0.3 per cent rise in borrowing by owner occupiers was overshadowed by the major rise in lending to investors.
The strength of the rental market, which has vacancy levels of about 2 per cent nationally, helped increase loans to property speculators by 4.6 per cent to $6.1 billion.
St George chief economist Steve Ryan said that after two years of weakness the most encouraging aspect was the lift in loans to investors.