Yesterday’s dwelling approvals data for July suggested that Australia’s rental crisis will soon get much worse.
As illustrated in the next chart, dwelling approvals plunged 21% in trend terms in the year to July, with house approvals down 18% and unit approvals down 26%:
Australian dwelling approvals tanking.
As shown in the next chart, high-rise apartment approvals have well and truly collapsed, down 53% from their 2015 peak, with the three biggest states each experiencing massive declines:
High-rise apartment approvals tanking.
The timing could not be worse for Australian renters, where listings have already collapsed to their lowest level in eight years:
Rental listings at 8-year low.
In particular, unit vacancy rates have collapsed, down to just 1.4% as at June:
Unit rental vacancy rates have collapsed.
Accordingly, unit rents are rising at their fastest pace on record, according to CoreLogic. Unit rents surged 3.7% over the three months to July and saw the 12 months to July (10.7%) overtake the year to June (10.0%) as the highest annual rental rise on record:
Unit rental growth highest on record.
The rental situation will only deteriorate from here, given the pending decline in construction will hit as international student numbers and immigration are expected to rise to their highest ever level in 2023.
The inevitable result will be falling rental vacancies, soaring rents, and an increasing number of Australians being thrown into homelessness.
It is an inequality disaster in the making.
