Governments need to act to counter skyrocketing rents, says head
Homelessness may rise as the national rental crisis continues to worsen, with vacancy rates falling to a 16-year low of 1% and weekly rents doubling in the past year, according to SQM Research.
The economic and property analytics firm found that 36,868 properties were available in March, 0.2% less than last month and only half of what was available at the same time last year, The Australian reported.
As a result, the cost of a capital city rental rose by another 2.2%, equating to an annual rise of 11.8%, according to SQM managing director Louis Christopher. Regional costs saw an even greater impact, rising more than 15% over the past year in some areas.
The 16-year low in supply is an effect of a crisis that was brewing even before the pandemic, Christopher told The Australian. He said that without stronger policy to target accessibility, homelessness rates could go up.
“Market rents have exploded … and the recent monthly data suggests we are still not at the worst point of the crisis,” Christopher said. “We were thinking that at least regional Australia may have started to have some relief as people return back to the cities, but that has not happened as yet. Many localities and townships are recording zero vacancy rates. It’s likely homelessness will be increasing in this environment.”
Christopher acknowledged that the issue would not be solved “overnight,” but said he hoped that “the various state and territory governments will ramp up their rental assistance packages in order to cushion the rental accommodation emergency we have here and now.”
A healthy vacancy rate is around 3%, according to The Australian. Currently, each of the smaller capital cities have fallen below 1%, with Hobart and Adelaide at 0.3%, representing only 206 and 1,524 available rentals, respectively.
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Darwin, Canberra and Perth have 0.5% of rental properties advertised, while Brisbane’s vacancy rate is 0.7%, The Australian reported.
The number of areas with no vacancies is also growing. Mount Pleasant in New South Wales’s Illawarra region, Clarendon Vale in Hobart and the Melbourne suburbs of Mount Evelyn and Gembrook are among the regions reporting a 0% vacancy rate, according to The Australian.
Sydney and Melbourne each posted a 0.4% drop in vacancies month-on-month, reporting vacancy rates of 1.6% and 1.9%, respectively. The tightening has come with the end of lockdowns and the return of migrants and international students.
Brisbane and Adelaide – which have both seen a spike in interstate migration – posted the highest gains in weekly costs, The Australian reported. Rental prices rose more than 3% last month to reach $500 per week in Brisbane, up 15.2% year on year, and $454 per week in Adelaide, an annual spike of 14.3%.
