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The surprising reason Australians will soon be paying $5000 more a year to rent despite Covid killing population growth
- Propertyology is predicting annual rent increase of $2,000 to $5,000 by 2022
- Five of Australia’s eight capital cities have rental vacancies under one per cent
- Major regional centres in every state have similarly tight rental market
- Tenants face very stiff competition outside of Sydney, Melbourne and Brisbane
Australians could soon be paying $5,000 a year more in rent despite coronavirus restrictions killing population growth.
The weakest population growth since 1916 has done little to make life easier for tenants, with renters often living in caravans and even tents until an affordable house is available.
The majority of Australia’s capital cities and many regional centres have rental vacancy rates of less than one per cent and this is set to get worse as more professionals working from home flee Sydney and Melbourne.
Propertyology head of research Simon Pressley predicted rents for a standard property would surge by up to $5,000 a year by 2022.
Australians could soon be paying $5,000 a year more in rent despite coronavirus restrictions killing population growth. Pictured is a house at Maitland north-west of Newcastle being leased for $470 a week in a town with a rental vacancy rate of less than one per cent
‘To secure a standard rental property over the next couple of years, it will not be uncommon for households to need to find an extra $2,000 to $5,000 per annum,’ he said.
‘These next couple of years will produce the biggest increase in rents that Australia has seen in living memory.’
While Sydney and Melbourne have high rental vacancy rates – with very few international student arrivals – Perth, Adelaide, Canberra, Darwin and Hobart have rental vacancy rates of less than one per cent, SQM Research data for October 2020 showed.
Regional centres, too, have ultra-low vacancy rates from Maitland in the New South Wales Hunter Valley to the Margaret River south of Perth, Mount Gambier in South Australia, Mackay in north Queensland and Mildura in northern Victoria.
‘There are reports of families living in tents and caravans because there’s nothing available for them to rent,’ Mr Pressley said.
Despite the dramatic drop in population growth, Mr Pressley said Australia still had an under supply of housing.
‘The reality is that Australia does not have enough housing supply for its existing 25.6million population,’ he said.
‘Most of Australia had an under-supply of housing (for sale and for rent) prior to COVID-19.
‘While this germ has managed to cause quite a bit of inconvenience for Australian lifestyles, no germ has the ability to dump thousands of extra dwellings out of the sky.’
Before the pandemic, net immigration stood at 200,000 a year, putting upward pressure on Sydney and Melbourne house prices and rents.
Propertyology head of research Simon Pressley predicted rents for a standard property would surge by up to $5,000 a year by 2022. Pictured a house at Mackay in north Queensland available for $665 a week
Since Australia in March banned non-citizens and non-residents, arrival numbers have plunged to levels unseen since World War I more than 100 years ago.
In September alone, just 4,320 people arrived in Australia to stay long-term, marking a 92.6 per cent plummet from the 58,320 figure of the same month in 2019.
As of October Propertyology, a buyers’ agent, calculated Sydney and Melbourne had 53,525 rental properties available in two cities with a combined population of 10.5million people.
The rest of Australia had 20,696 homes available for lease covering the other 59 per cent of the nation’s population – or 15.1million people.
The Reserve Bank is expecting the closure of Australia’s border in March to non-citizens and non-residents to shrink population growth to just 0.2 per cent in 2020-21, the weakest increase since wartime 1916.
The majority of Australia’s capital cities and many regional centres have rental vacancy rates of less than one per cent and this is set to get worse as more professionals working from home flee Sydney and Melbourne. Pictured is a house in the upmarket Canberra suburb of Deakin being leased for $1,500 a week
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