The rental crisis gripping Australia continues to worsen, with CoreLogic’s April housing report showing that rents climbed a further 1.1% across the combined capital cities over the month on the back of record high immigration:
Growth in unit rents continues to outpace rises in house rents.
Across the combined capital cities unit rents jumped 1.6% in April compared with a 0.9% rise in house rents.
Annual house rents lifted by between 9.1% (Melbourne) and 13.1% (Perth) across the major capital cities.
Annual unit rents are soared by between 12.1% (Adelaide) and 19.1% (Sydney) across the major capitals.
CoreLogic’s research director, Tim Lawless, attributed the stronger rise in unit rents to affordability constraints (unit rents are significantly cheaper than houses) as well as surging overseas migration, especially international students.
These migrants and students “tend to be more pronounced in inner city areas as well as precincts close to universities and transport hubs that are typically associated with higher density styles of rental accommodation”.
“Another factor playing out is a lack of new unit supply. Medium to high density dwelling approvals have mostly held below average since 2018, setting the scene for a chronic undersupply across the medium to high density sector a few years from now”, says Lawless.
Worryingly, the trend rate of growth in rents is also accelerating across Sydney, Melbourne and Perth.
“Growth in dwelling rents reached a cyclical high of 3.9% in Sydney and 4.2% in Melbourne. Sydney unit rents are recording the fastest rate of appreciation, rising 5.8% over the past three months, followed by Melbourne unit rents, up 5.0%, and Perth unit rents up 4.9%”, notes CoreLogic.
CoreLogic expects rents to continue rising at a swift pace given vacancy rates are holding around record lows in most regions.
“Until we see rental demand and rental supply becoming more evenly balanced, rents are going to keep trending higher”, Lawless warns.
“The unfortunate reality for renters is there doesn’t seem to be any material lift in rental supply over the short term, while demand side pressures are likely to rise further as migration stays high”.
In other words, the Albanese Government’s record high immigration program is an unmitigated disaster for Australian renters, and will see financial hardship increase and thousands of Australians pushed into homelessness.
It is also a disaster for inflation, given the surge in asking rents recorded by CoreLogic and other data providers is yet to properly feed into the CPI.
The Albanese Government’s mad immigration push is, therefore, making life harder for the RBA, Australian renters and Australian home owners, the latter of whom will see interest rates remain higher for longer.
