The expansion of schemes to attract people to the property market is unlikely to help mitigate the rental crisis, according to a report from PropTrack
The expansion of schemes aimed at attracting young people into the property market is unlikely to have a significant impact on increasing rental supply, according to a report from PropTrack. This comes as stock levels for rental properties experienced the fastest monthly decline since 2017, with a decrease of 18.9% in April.
A notable divergence in rental supply is also becoming apparent, with new listings in capital cities dropping by 7.4% year-on-year in April, while regional areas reported a 15.8% increase, according to a report by The Australian. However, overall, the total number of homes available for rent has fallen by more than a third since the beginning of the pandemic.
Cameron Kusher, PropTrack's director of economic research, said that the current low stock levels are being exacerbated by tight market conditions and fewer investors purchasing properties.
“There's no meaningful increase in supply imminently arriving,” Kusher told The Australian. “I think we'll continue to see the amount of stock drifting higher in the regional markets, and that's just because there are fewer people leaving the capital cities, and there are people that moved to regional areas moving back.”
The rental crisis has been a major concern for both federal and state governments. Recent data from PropTrack showed a slight easing in Australia's rental vacancy rate, which currently stands at 1.42%, well below the "healthy" threshold of 3%.
Limited impact from government schemes
While the federal government's budget included an increase in rental assistance and an expansion of the First Home Guarantee Scheme to allow family and friends to jointly purchase a home with a deposit as low as 5%, Kusher does not anticipate that these measures will have a significant impact on the tight rental market.
“The exciting changes announced in the budget were pretty niche, and I don't know that that would attract a lot more people to that scheme,” he said. “Maybe some first-home buyers do just start to bite the bullet and say, yes, it's going to cost me more, but I'd much rather spend that extra money on my own home and have that security of tenancy... But I could conceivably see that happening at some point later this year.”
Read next: New rental listings tumble as crisis continues
None of the markets recorded an increase in new rental listings on a monthly basis, The Australian reported. The most significant change was observed in Darwin, which experienced a 25.8% decline, followed by Hobart (down 21.3%) and Melbourne (down 20.8%).
Rental conditions have worsened considerably since the onset of the pandemic three years ago. The Australian Capital Territory and Hobart were the only jurisdictions to record an increase in rental listings over this period, with growth rates of 47.8% and 1.7%, respectively. Conversely, Darwin (down 56.7%), Perth (down 52.8%), and Sydney (down 42.7%) were the most heavily impacted areas.
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