The domain’s head of economic research, Nicola Powell, said the figures highlighted extraordinarily tight rental conditions for tenants.
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“Nationally, vacant rental listings are 45 percent lower for the year and have fallen in most capital cities,” Powell said.
“The rental market remains firmly in favor of landlords in all capital cities, with a shortage of rental supply increasing demand for rentals and further increasing competition among tenants.
“With the vacancy rate falling to an all-time low, it’s not an overnight fix.”
Impact Economics and Policy economist Dr Angela Jackson said the country’s two biggest capitals were starting to tighten as other rental markets around the country have been since the pandemic .
“We’re actually seeing Sydney and Melbourne catch up with the rest of the country. They were closed, which led to higher vacancy rates,” Jackson said.
Rents are shrinking even with significant rent increases, experts say. Credit:
“It is increasingly difficult to find a rental in the main capitals. This will undoubtedly lead to higher rents in these markets.
“Housing is the largest part of household consumption, and the cost that we cannot avoid is the first that must be paid.”
He said when rents go up, that has a significant impact on households.
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“Certainly, for low-income renters, they’re going to face increasing rates of housing stress or more severe housing stress,” he said.
“Even for middle-income households, the stress is likely to spread to our capital cities like Sydney and Melbourne in the next 12 months.”
He said rental demand was driven by inner-city renters moving to regional markets, as well as workers moving from foreclosures to new single-family or smaller rentals, rather than immigration, which it has yet to return to pre-pandemic levels.
Housing and Tenants Union of Victoria secretary Eirene Tsolidis Noyce said it had become extremely difficult for tenants, amid reports of rent increases of $600 a month in some cases.
“We definitely notice this increase because our members are feeling the excessive pressure,” Tsolidis Noyce said.
“We are strongly opposed to the idea that rising interest rates should be passed on to tenants with lower incomes and less financial stability and less assets. If you don’t own the property, you shouldn’t be paying more than someone else’s mortgage for less than the profit.”
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Barry Plant head of property management Emma Gordon said it was a two-speed market in Melbourne, with city rentals staying empty longer than properties outside the CBD.
“The city hasn’t fully recovered and it’s not experiencing open house lines and high demand where you’re getting six or eight applications on properties,” Gordon said.
“But in the other areas of Melbourne, the outer areas, competition is high, stock is low and as soon as stock comes on the market it’s being rented,” he said, adding that there were rental increases in all levels
Ray White property management chief executive Emily Sim said Sydney rents were increasing by an average of $80 to $100 a week.