TRANSCRIPT
The national rental vacancy rate has returned to a record low, with rental availability plummeting over the September Quarter to 0.8 per cent, the lowest level since March.
It's pushed rents to new highs, and at a time when supply is limited, is causing investors to sell under holding cost pressures.
Real-estate website Domain has put low vacancy rates down to a persistent shortage of listings, combined with unprecedented influx of people moving to Australia and fewer leaving.
The figures confirm what renters already know. Perth Student Vivek Arumugam is facing a significant increase in the cost of his university accommodation at the end of the university year.
"It is a drastic change. So, it's like 210 I'm paying, so 236 is quite not achievable, it's very hard to pay for students. We can save 100 dollars for the three or four weeks if we are paying 210 instead of 236."
The cost of housing has reached record levels across much of the country, forcing many like Vivek to split the expense between more people.
"The alternative is sharing a house with friends. So if I'm looking for an individual house, it's very tough to find. I'm planning for next semester with my friends, around four to five friends, we're looking for houses, like flats somewhere nearby."
But homes are becoming harder to come by. Vacancy rates across Australia are at or near record lows, with the tightest markets in Perth and Adelaide. Brisbane and Darwin are close behind, while the nation’s capital sits at 1.6 percent
Domain's Chief of Research and Economics Nicola Powell says that this is pushing prices up at an unprecedented rate.
"We saw asking rents across our combined capitals continue to rise over the most recent quarter and actually across the combined capitals it means we have achieved another new record high. It's the longest continuous stretch of rising rents that we have ever seen, across our combined capitals, house rents have now risen for 10 quarters in a row and units have risen for nine quarters in a row."
House rentals in Melbourne have risen the most, with tenants paying almost six percent more over the September quarter.
Sydney remains the most expensive capital, with houses up almost three per cent. Adelaide, Perth, and Brisbane all saw significant spikes in the advertised rent of units, while leasing a house in Canberra dropped slightly, and Hobart and Darwin remained relatively stable throughout the quarter.
Ms Powell says that Australia needs thousands of new homes to get the vacancy rate to a more sustainable two to three per cent.
"It has been an under-supplied rental market for such a long time, it really is within the realm of a landlord's market. To get a balanced rental market, we need anywhere from between 40,000 to 70,000 additional rentals across Australia, so that is like adding all of the dwellings in the L-G-A of Newcastle into Australia's rental market, which is no small feat to be achieved."
But many landlords are jumping ship. Investment properties represented close to a third of sales in Victoria, New South Wales and Queensland in July. Before the pandemic that figure was between 15 and 20 percent.
Senior Director of Marshall White Real Estate John Bongiorno says that that high sale values and increasing regulatory pressure on investment properties has left many landlords looking for a way out.
"Particularly here in Victoria we've seen increases in land tax we've obviously seen the increases in interest rates we've seen a whole raft of changes to the residential tenancy act over the last 12 months. And primarily the majority of our landlords are just mum-and-dad investors, that have one investment property, but they're being pushed out of the marketplace, and again that's disadvantaging those tenants that are looking for properties, and it's forcing rents up."
As the national housing crisis worsens, it appears that renters and landlords alike are losing out.
