A rise in rental availability may not be seen until 2024, expert warns
The share of listed rentals below $400 has been cut almost in half over the past 12 months as the rental crisis shows no signs of abating, according to new data from PropTrack.
The share of properties available to rent for under $400 per week fell to 17.6% this month from 32.8% the same time last year, according to PropTrack’s latest Market Insight Report.
Most Australian capital cities are feeling pressure from the rental crisis, with demand outstripping supply thanks to regional and overseas migration, share house tenants seeking their own housing, and falling take-up of investment properties, The Australian reported.
Cameron Kusher, PropTrack director of economic research and author of the report, said that a rise in rental availability may not be seen until 2024, with total properties listed for rent on realestate.com.au at the lowest level since 2018.
Lack of investors
“The quickest way to get more rental stock is to get more people buying investment properties, but that’s just not happening,” Kusher told The Australian. “Once interest rates start moving and once we get to the low point of these price declines we’re in … maybe that’s when we’ll start to see investors jumping back in.”
The ACT posted the lowest share of rentals under $400 at 0.9% in February. Melbourne had the highest rate of all capital cities at 15.6%, but that’s still less than half of last year’s level of 32.9%.
Only 4.9% of rentals were under $400 in Sydney, while Brisbane’s level was 9.9%, The Australian reported.
Adelaide, Perth, Canberra and regional Western Australia also saw their under-$400 rental availability halve, while Hobart and Darwin dodged the slowdown.
Kusher said that while there was more demand for houses during the pandemic, these dwellings are now seeing the strongest decline, falling from 42.5% at the start of the pandemic to 13.6% this month.
“More people have to go into units. It also means people have to move further away from the city centre, or from where the jobs are … Particularly in Sydney and Melbourne, that’s longer travel times and more tolls if you have to drive to work,” he told The Australian.
Tenant woes
Leo Patterson Ross, chief executive of the Tenants Union of NSW, told the publication that calls made to the union’s tenants and advice services about rent increases had tripled from last year.
“It’s not that these [under-$400] properties don’t exist anymore, it’s that the properties are priced up … We also know that most of the supply or even entirely new supply comes in at higher price points,” he said. “One of the features of the current crisis is that it is really affecting everywhere … all at once.”
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Ross said that there was not enough public and community housing, and many renters would have to resort to share housing in order to find affordable accommodation.
While some have suggested instituting rent controls as a way to rein in rental affordability challenges, the Real Estate Institute of Queensland has warned that such a strategy would likely exacerbate the supply issue.
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