In the past 12 months, rents surged at a record-breaking pace of 14.6 per cent for houses and by 17.6 per cent for units as vacancies plummeted to a record low.
When Diana Eloise Binay and her partner got just two weeks to vacate their Sydney rental property a couple of months ago, they knew they would have to compete hard to get another rental property.
“Market asking rents have risen by 37 per cent on average since the start of 2020, so as a proportion of wages, market rents are at record highs. With the now expected influx of international students, market rents are likely to keep rising at an accelerated rate.”Without new properties coming to market, the situation is likely to get worse, says Steve Mann, CEO, UDIA NSW.
Sydney-based landlord Free Morrison says he was shocked to get $50 more rent on his new investment property.“I was blown away by the strong demand from renters. We had about 40 people applying on the first day alone,” the 27-year old investor says. “When it drops to 1 per cent or below, there’s just not enough stock available for people, and we’ve been sitting around the 1 per cent mark for about nine months now, something which we haven’t seen before.”
“Private sector investment, which is the main contributor to rental supply in Australia, has generally been trending lower since 2015, apart from a temporary surge in investment during the recent phase of strong capital growth in housing values,” Lawless says. Based on the 2021 Census, only 12.2 per cent of rentals were owned by a state/territory housing authority or community housing provider, down from 13.7 per cent in the 2016 Census.
But efforts like these will take time, and the current dire rental situation calls for immediate action, says Lawless.“While the federal budget has outlined a boost for social and community housing funding, along with incentives for institutional investment in the build to rent sector, this additional funding doesn’t go live until 2024, and is likely to be a slow burn after that due to factors such as planning and build time,” Lawless says.
“We need to make it easier to become a landlord and provide better protection to landlords who are now becoming afraid of getting a tenant they can never evict,” she says.
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