Over recent months we’ve witnessed both the Coalition and Labor launch a raft of new policies – from home loan guarantees to shared equity schemes – aimed at driving more first-time buyers into the housing market and propping up home values.
At the same time, a bigger crisis is taking place among Australia’s growing army of renters, who are suffering escalating housing costs amid record low vacancy rates. Yet, they are invisible to our politicians.
Yesterday, CoreLogic released its April housing market report which noted that Australia’s rents are on the rise again – soaring by 2.7% over the three months to April and by 9.0% year-on-year. Rental inflation is hot across all capital cities, and is even hotter across the regions.
Rental growth is increasing why house price growth fades.
The rental situation is also worsening amid the return of immigration, which has lifted unit rental growth (+8.7%) to nearly on par with house rental growth (+9.1%):
On a rolling quarterly basis, we are now seeing unit rents rising faster than house rents especially in Sydney and Melbourne where rental conditions across the unit sector were previously much softer.
The shift in rental demand towards units reflects both rental affordability pressures, which are deflecting more demand towards the ‘cheaper’ unit sector, and the return of overseas migrants and visitors. Rental demand from overseas arrivals tends to skew towards inner city and higher density precincts.
In Sydney, unit rents were up 3.0% over the three months ending April, a full percentage point higher than the rise in house rents (2.0%). In Melbourne, the difference is starker, with unit rents 3.6% higher over the past three months compared with a 1.2% rise in house rents.
The rolling quarterly change in rents is now outpacing the rolling quarterly change in housing values across most of the capital cities.
Last week, Anglicare released its 2022 Rental Affordability Snapshot, which found that rental affordability has crashed to record lows and thousands of Australians risk being “pushed into rental stress and homelessness”.
Why are Australia’s renters, who are typically lower income and our most vulnerable citizens, being ignored by our politicians?
