As people across the country struggle with the current rental crisis, tenants in two Australian cities have been singled out for some very bad news.
While housing prices may be falling across the country, the cost of rent is certainly not, with new data showing that two Australian cities in particular are facing a rapid rise in housing costs. .
Tenants in almost every part of the country have felt the needle of rising prices since the start of the pandemic, with the situation having become even more serious in recent months.
Now, PropTrack’s rental report for the June quarter of 2022 has found that the rental market is likely to continue to heat up, and Sydney and Melbourne will face the weight of the crisis.
The report found that a limited supply of rental properties is driving competition, with the number of new listings in June 2022 13.8% lower than the decade average.
The number of tenants per rental property listed on realestate.com.au has increased 28% year-on-year in the capitals, and Sydney and Melbourne have experienced the largest increase.
PropTrack Director of Economic Research and author of the report, Cameron Kusher, said rising rental prices in major cities will continue for some time, especially as more activity returns to these areas after the Covid .
“With overseas and interstate migration returning with borders now reopened, it seems likely that rental conditions will tighten even further over the next few months,” he said.
“This is likely to be more evident in Sydney and Melbourne, where demand and rental prices fell during the pandemic, but are now recovering rapidly.”
The report also found that the new fiscal year means a higher tax for investors and higher interest rates in many jurisdictions.
As a result, it is likely that many landlords will try to pass these rising costs on to tenants where they can, resulting in even higher rents.
Rental prices in Sydney have grown by 6% and 3.7% over the last year.
Rental growth has also been more than five percent in all other capitals.
The average rental price for a home in Sydney is $ 620 per week and $ 500 per unit, compared to $ 495 and $ 410 in rentals in the NSW region.
In Melbourne, the average weekly price of a home is $ 450 and $ 400 for a unit, compared to $ 420 and $ 330 in Victoria Regional.
Nationally, the average weekly rent for a home is $ 490 and $ 440 for units.
The largest year-on-year increases in rents were observed in Darwin (14.6%), Adelaide (10.3%) and regional areas of South Australia (17%) and Western Australia (12.8%).
The PropTrack report found that rents have risen at the fastest pace in seven years, and average weekly rental prices rose seven percent compared to June last year.
However, there could be good news for those in the regional areas, and Kusher says there are indications that the crisis is easing in some areas.
“There are already some indications that in certain regional areas, rental pressures are easing, with more rental stocks and properties taking longer to rent,” he said.
“This is logical, as the drive to change regionally has diminished as large cities have reopened. Some people who moved during the pandemic will now return to large cities, while others who decide to stay they will look to buy their own house. “
This will be welcome news for thousands of Australians, some even left homeless as a result of the rental crisis.
But for other parts of the country, rental options are likely to remain extremely tight in the future, and Kusher says relief is “unlikely” that relief will be underway soon.
So what is the solution to the crisis? More rental properties.
Unfortunately, increasing the number of rentals available is easier said than done.
“Rising investor purchases are addressing this, but it will take time to ease the existing pressure,” he said.
“Federal and state governments continue to offer incentives to first-time home buyers. With falling property prices and rising rents, this may encourage some to move from rent to property.
“Over time, this may alleviate some of the pressures of rental supply, but it is likely to be offset primarily by the return of arrivals from abroad, most of whom are looking for rental accommodation on arrival.”