Richard Temlett, national executive director at consultancy firm Charter Keck Cramer, has warned that tenants face years of strong rental inflation as housing supply continues to lag demand:
“It will take this long to mobilise supply, so unfortunately, rents will continue to rise by some double-digit in some cities over the next couple of years before the market recalibrates”, Temlett told The AFR.
SQM Research managing director, Louis Christopher, made similar warnings, noting that asking rents have jumped by 1.2% in the past 30 days amid strong immigration-led demand.
The reacceleration in rents comes as the number of vacant rental homes nationally fell by 852 residences to 38,864 properties, the first monthly decrease since January.
“After the slight easing in vacancies over the first half of 2023, this is somewhat of a disappointing result for tenants”, Christopher said.
“Rents have definitely picked up again because there’s an ongoing undersupply of rental properties and there’s just too many renters needing a home at the moment”.
“We’ve got more renters returning to the cities from the regions as the return to the office gathers pace, as well as higher international migration”.
“We were hoping that the rental market will continue easing, but at this stage, it looks like the markets could tighten again”, he said.
Source: SQM Research
In his latest rental report, Louis Christopher blamed “rampant population growth” for Australia’s rental crisis:
“Clearly, acute rental shortages remain with us. And besides more people grouping together to share the burden, there is no significant solution on the horizon”.
“[This problem] has been driven by rampant population growth”.
“Australia currently has, by far, the fastest growing population for any OECD country and clearly the rampant increases are currently breaching the country’s capacity to house all our people”.
The 2023 federal budget projected that Australia’s population would swell by 2.18 million people (equivalent to the population of Perth) over the five years to 2026-27, driven by 1.5 million net overseas migrant arrivals (equivalent to the population of Adelaide).
The 2023 Intergenerational Report projects that Australia’s population will grow by 14.5 million people over the next 40 years, equivalent to adding a combined Sydney, Melbourne, Brisbane and Adelaide to Australia’s current population.
There is simply no way that housing supply can ever keep pace with this volume of growth of population growth (read immigration).
Australian renters should demand the federal government slash immigration.
Otherwise they face escalating costs, more financial pain, and homelessness.
