The average vacancy rate across all capital cities has now hit a 16 year low of just one per cent according to Kevin Young, President of Property Club, one of Australia’s largest independent property groups.
Mr Young said that this 16-year record low vacancy rate combined with surging inflation would see asking rents on average rise across the main capital cities in Australia by over 20 per cent during the coming year.
“Asking rents on average have already jumped by around 15 per cent over the past year and with the RBA now projecting overall inflation to rise to seven per cent by December 2022, renters should brace themselves for big rent increases during the next twelve months as the rental vacancy rate famine worsens.
“The last time the average national rental vacancy were lower than now occurred back in 2006 when it fell to 0.8 per cent and that also led to a surge in rents across Australia.
“However, the major difference in 2022 is inflation is now out of control while interest rates are surging and as a result landlords will pass on any inflationary costs and mortgage interest rate rises onto tenants.
“Australia is now facing a homeless crisis time bomb that will explode unless we urgently increase the supply of private sector rental properties.
“Property Club believes this can only happen unless two major reforms are undertaken to boost the supply of private sector rental homes over the long term.
“Renters are now paying the price for two misguided policies that have seen many investors sell their properties and discourage them from buying second hand homes.
“New banking rules have forced hundreds of thousands of property investors to switch their loans from interest only to principal and interest loans. Many cannot afford the additional mortgage repayments and sold their homes to owner occupiers that have left their tenants scrambling to find a new home.
“At the same time the Federal Government removed tax depreciation benefits associated with second hand properties meaning that investors were encouraged to buy only new properties which again shrank the supply of available rental homes.
“Unless these two changes are undertaken immediately, Property Club believes that Australia will shortly face an unprecedented rental housing crisis,” he said.
