4 minute read
Real Estate
Regional NSW feels rental squeeze
A new analysis of rental vacancies rates in regional NSW shows tenants living in regional centres across in the country’s largest state are most vulnerable to rent increases, as landlords look to recoup the cost of rising interest rates.
Everybody’s Home - the national campaign for real housing solutions - has analysed and ranked rental data from SQM.
The five regions impacted most by the state’s rental crisis shows rental vacancy rates well below 1% at the same time rents have increased between 10-20%
In Broken Hill/Dubbo, there are 15246 rental properties, with a vacancy rate of 0.42% - an annual increase of 14.5%. Asking rent is $390 and 64 rental properties are vacant.
In the Murray region, there are 25282 rental properties, with a vacancy rate of 0.43% - an annual increase of 11.4%. Asking rent is $365 and 108 rental properties are vacant.
In the Riverina region, there are 32573 rental properties, with a vacancy rate of 0.44% - an annual increase of 16.5%. Asking price is $379 with 143 rental properties vacant.
In Wollongong, there are 32573 rental properties, with a vacancy rate of 0.55% - an annual increase of 18%. Asking price is $548 with 407 rental properties vacant.
In Tamworth, there are 32573 rental properties, with a vacancy rate of 0.58% - an annual increase of 9.9%. Asking price is $358 and 178 rental properties are vacant.
Everybody’s Home spokesperson, Kate Colvin, said as mortgage interest rates doubled many landlords would seek to pass the cost on to tenants.
“Renters are in for a seriously difficult time as landlords capitalize on historically low vacancy rates to shift the rising cost of interest rates on to their tenants.
“After a decade of inaction on social and affordable housing from the previous Commonwealth Government we really are in a perfect storm.
“There are limited options for people who can’t afford to buy but want to stay in their local community.
“Just because you rent, doesn’t mean you haven’t established deep roots in a community.
“Renters on low and modest incomes work in the local shops and aged care services.
“They have kids in local schools, are members of sports clubs, and attend local churches.
“They deserve the same stability as everyone else.
“We need to start planning for more social and affordable houses now.
“A dip in construction starts is forecast for next year, and that’s a great opportunity for Government to swing in and take up the slack in the industry.
“The bitter fruit of a decade of housing neglect is with us now and is being unfairly forced on low income renters. This problem will only get worse if we fail to act.”
Housing market downturn could be short-lived
Infation expectations have peaked earlier than feared, and infationary pressures are now apparently easing across many parts of the global economy.
Consequently, Australia’s housing downturn could prove to be relatively short-lived, as a strong underlying demand for housing driven by a reduced average household size and a return to rapid immigration is expected, according to Pete Wargent, co-founder of Australia’s frst national marketplace for buyer’s agents, BuyersBuyers.
Mr Wargent said, “the downturn in housing market sentiment has been largely driven by one major factor, being infation, and the related fear of a sharp increase in mortgage rates. For as long as consumers fear rising mortgage rates, activity in the housing market will be reduced, with both the volume of buyers lower, and the duration of transactions longer.”
“The good news for borrowers is that the peak of the infation hysteria now appears to have passed. Marketbased measures of infation expectations in the U.S. suggest that the peak is already in, with 5-year breakevens dropping all the way back down towards 2.6 per cent, and 10-year infation expectations now below 2½ per cent. These are the lowest fgures since September last year.”
“Australia’s infation profle is tracking some way behind other parts of the world. With rising prices for electricity and rents still to fow through to the offcial fgures, infation isn’t likely to peak here until the end of 2022.
“But the important thing for consumers is gaining a level of comfort that infationary pressures will eventually fall away, and therefore not being fearful of rising interest rates. Australia’s biggest bank already sees the RBA cutting interest rates in 2023.
“And in both historical and absolute terms, of course, interest rates are still relatively low,” Mr Wargent said.
“Analysts will point out that any increase in mortgage rates reduces borrowing capacity, which is obviously true. But most borrowers don’t use their full borrowing capacity, and the crucial factor in the downturn ending is simply a change in sentiment.”
Grant Rossiter - Sam Burcher - Jacqui Smith - John Wilcox -
