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Once again the Property Expo is in town and once again the Reno Kings are generously offering free tickets.

I will be attending all three days so please drop in and say hello to me on Stand D13. I enjoy my trips to Brisbane and would love to catch up with as many of you as possible from the area.

Visit the Reno Kings to score yours now, and check out their site.

I attended the annual BIS Shrapnel conference on the economy and market predictions last week and was not surprised to hear that their forecasts are less than enthusiastic. After all they predicted two years ago that interest rates would be up to 9% by 2006.

In my opinion the key to property investment is research, which means monitoring all recognised forecasters and then using their suggestions to come to your own decision. Rob Mellor, from BIS Shrapnel covered the underlying indicators that make up forecasts.

Some of the more important being affordability and demographics. One of his predictions I found interesting was for market rents. He indicated that in the next four years Sydney rents would rise by 40%, Melbourne by 25% and Brisbane by 35%.

Continuing on this theme Macquarie Bank economists Brian Redican and Daniel McCormack recently indicated that over the past decade, the influx of investors into the housing market and strong growth in first home buyers had kept a lid on rents. "More recently, investors have been steered away from the housing market by the buoyant stock market, rising interest rates, low yields and the prospect of falling house prices," they said.

This has meant rental vacancies in the major capital cities have fallen towards two per cent, which is generally the point at which rents start to rise sharply.

They suggested that with more than 20 per cent of households renting, a 15 per cent rise in rents would have the same impact on household disposable income as a 50 basis point (half a percentage point) increase in mortgage interest rates.

If this is correct, in Brisbane where there is a anticipated 30% increase in rents over the next 4 years, this would be equivalent to a 1% interest rate rise. As interest rates are usually increased only 0.25% at a time this would be equivalent to four rate rises in four years.

But it would seem its not just the analysts who have something to say about the rental market at the moment. Talking to a few renters around Sydney recently I was surprised to hear that demand is so high in some areas that agents are holding Dutch auctions. In some instances the agent will set the rent at a level acceptable to the investor and the interested parties have to compete until someone ends up the highest bidder.

If you are considering buying property any time soon it may pay you to look at some of the loan products that allow minimal or no deposit so you can capitalise on the demand for rentals. While generally incurring higher lenders mortgage insurance fees these products could get you or your children into the market more quickly.

The West Australian newspaper recently reported that a growing number of families with annual incomes of $55,000 or more had become long-term renters because they could not find a suitable house or were worried about being able to meet the mortgage repayments. There is now a growing concern about middle-class tenants.

GE announced over the weekend that they were introducing a 40 year mortgage into the market. Whilst daunting for most, those who have a negatively geared property portfolio may be interested in reducing their monthly commitment. This longer mortgage term follows the successful introduction in the US and UK. CBA and Westpac did not rule out following suit and will perhaps even consider a 50 year mortgage.

With this trend of owning debt for longer Lisa Barker of WA Council of Social Service acknowledged that we may even see “parents handing over mortgages to their children, rather than handing over assets.” Now that’s a sobering thought.

I’ll be interested to see in the coming months, how lenders will start addressing these issues and whether they will respond by introducing further innovative products.