Suburbanite Principal, property commentator and valuer, Anna Porter took a look at the Proptrack September 2022 Rental Report, and reveals what it really means for Australian renters and prospective investors.
Porter reveals the burden is being felt from all sides of the property market as renters are faced with increasing prices and lack of supply while some mortgage holders are facing detriment to their monthly budgets as rates continue to rise.
Yesterday, Aussies were hit with the sixth consecutive rate rise bringing the RBA’s cash rate target to 2.85%. Does this coincide with the rental crisis?
“Firstly, the data indicates Sydney, Melbourne and Brisbane are the hardest cities to find rental accommodation as prices have surged 4.3% nationally, over the past three months,” shares Porter.
“The supply just simply can’t keep up with the demand, especially as international students, visa-holders and regional migrants start to return to the capital cities.”
The report also confirms a supply issue.
“A negative picture is further painted when year-on-year changes across new rental listings is measured,” says Porter.
“The negative figures recorded for Brisbane, Sydney and Melbourne directly correlate with interest rates rising, and unfortunately there is no solution in sight for additional stock to hit the market,”
“So the rental housing affordability crisis is real. And if our ‘smashed avocado’ generation are stuck in one of the country’s most unaffordable rental markets, how can we expect them to save for a home of their own?”
THE OPPORTUNITY FOR INVESTORS
Data reveals new lending to investors is at the lowest it has been since June 2021 and a declining number of investors are purchasing homes to rent out.
But according to Porter, there is an opportunity here for investors to take advantage of the higher rental prices, achieve a higher yield and provide more stock to the market.
“As an investor and a landlord, now is a great time to consider the type of tenant you want in your property and get creative with your arrangements,” she suggests.
“As the affordability crisis worsens we will see an increase in larger families occupying smaller units, as well as share house structures, sub-leasing of rooms, family rooms and the like,”
“This is why granny flats work so well in Sydney but not as well in interstate locations like Darwin that are not facing such a dire rental housing crisis.“