New figures from Australia’s housing market have made grim reading for renters, with prices rising at historic rates and affordability falling to record lows.
Figures released by PropTrack on Thursday showed the national rental vacancy rate fell to an all-time low of 1.6 percent, while rents rose at their fastest quarterly pace in September, at 4.3 percent.
The study said limited rental demand, particularly in Sydney, Melbourne and Brisbane, was further supported by a decline in listings on reaslestate.com.au, which reported a 20.5% drop in September on a year-on-year basis to lowest level since 2003.
According to the report, new listings fell 10.4 percent from last month, while listing demand increased 18.8 percent year over year.
The increasingly tight rental market is also reflected in the reduction in the number of days a rental is advertised on realestate.com.au to an average of 19 days in September, according to the report.
Cameron Kusher, PropTrack’s director of economic research and author of the report, said new mortgage lending is down in combination with low levels of investor lending, factors that are exacerbating the rental crisis.
“With few investors buying rental properties, the limited supply of stock combined with high demand is driving up advertised rental prices,” Mr Kusher said.
He said new investor lending came in at $8.9 billion in August, the lowest since June 2021, while the share of total investor lending remained stubbornly below its medium-term average.
Mr Kusher said the rental crisis had returned to Australia’s big cities, which he attributed to overseas immigration after the pandemic and people returning from rural centers popular during the lockdown.
It was most acute in Melbourne and Sydney, he said.
“The majority of overseas migrants to Australia settle in these cities and few buy property before they arrive,” Mr Kusher said.
None of the factors driving the tight rental market appear likely to change in the near future, he said.
Melbourne saw the largest year-on-year increase in rental demand at 45.8 per cent, followed by Sydney at 26.8 per cent and Brisbane at 25.9 per cent.
In its first budget on Tuesday, Anthony Albanese’s Labor government set out plans to build a million new homes by the end of the decade as part of a “deal” between federal and state governments and the private sector.
Housing and rents, which federal Greens leader Adam Bundt called for a freeze earlier this month, will also be key issues in next month’s Victorian election, with the Victorian Greens already unveiling plans to build 100,000 new homes over the next 10 years.
The dire rental figures come amid increasingly troubling financial times for Australians.
Annual inflation hit 7.3 percent this week, the highest level since 1990, while Treasury estimates also forecast retail electricity sales to rise 20 percent by the end of the year.