They’re calling it a rental crisis.
Across Australia, renters are struggling to cope with a surge in rental prices. Why the sudden and unexpected change? It’s actually a combination of elements that are all being heightened at the same time.
A new report from the University of NSW (UNSW) and the Australian Council of Social Service (ACOSS) analysed trends in eight countries including Australia. It discovered that low interest rates, income aid from the government and the demand for houses instead of units is what caused the prices to skyrocket.
Moreover, the reopening of Australian borders, which would normally be celebrated, is also contributing to a higher demand for housing from migrant students and workers.
Couple those with the added pressure of flood victims trying to find homes and we’ve indeed got ourselves a rental crisis.
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What’s causing the rental crisis?
In addition to the points above, here are a few more contributing factors to the 2022 rental crisis in Australia:
- Fewer homes for rent: Investors experienced some insecurity during the pandemic. With the closure of borders and surplus in housing came unstable rental income. Many investors decided to put their money elsewhere, decreasing the availability of properties for rent.
- Renters are buying: the lowered interest rates invited more renters to purchase their first home, which took a bunch of affordable homes off the market that would potentially be for rent.
- Bigger demand: Now that COVID restrictions are easing, any plans for weddings or moving in are back on track. So on top of the influx of foreign students and professionals coming into the country, you have more locals looking to rent.
Increased rental prices in Australia
Changes in weekly rent over 12 months
Data from My Housing Market figures showed the increase in rental prices virtually across every major city in Australia to almost 10% over the past year, but more specifically in the prices for houses over units.
Lowered vacancy rates in Australia
Available homes for rent decreased significantly in the CBDs of Melbourne and Sydney which was accompanied by the increased rental prices.
These rental vacancy rates have also dropped to a 16-year low. The number is only expected to continue dropping as borders continue to open.
How are Aussies coping with the rental crisis?
Many Australians have sought other means of finding housing.
Jack Evans, a business owner living in Orange, NSW, told ABC News that he’s actually been renting from a family member. “…we’ve actually negotiated a price for rent that is probably below what the current inflated market value is,” says Mr Evans.
Others are turning to short-term rent landlords, like those operating through Airbnb. Instead of continuing to lease their spaces to travellers or short-term renters, they’re being asked to remove their listings and put them up for long-term rent.
What can renters do right now?
- Understand why you want to rent: If you know what the motivation is behind renting, you’ll also know what your priorities are and if you can do something else to work around it. It can also help you stay focused on your main objective. If your dream was to live in a house, consider if you should explore units instead for now.
- Write a solid application: competition is tough out there. If you want to stand out, put thought and attention to your rental application. Show that you’ve always paid rent on time and that you can pay your bond as soon as the application goes through.
- Check out all the open homes: Sometimes properties that don’t suit you at first glance are actually better than you think. So make the effort to inspect the home. Soho’s match feature sends you property matches based on your criteria so make sure you download the Soho app and check those out. Once you’ve shortlisted the listings you’re interested in, we’ll send you reminders on inspection times so you don’t miss a beat.
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Download the soho app. With the app, you can contact agents quicker, browse through your property matches and ultimately find your dream home even sooner.
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