Australia’s rental crisis continues to worsen, with new research revealing 20 regions where prices will soar by up to $5200.
The country’s vacancy rates are at their lowest since April 2006, and rental prices have subsequently increased.
Rental prices in capital cities increased by 11 percent in the 12 months to March, and regional areas experienced an even higher 13.1 percent year-on-year growth.
This led to buyers agency InvestorKit examining 300 areas nationwide to determine where renters can expect the most pain.
Their research found “clear signs” rental prices in 20 regions will continue to increase by $2600 to $5200 in the coming 12 to 24 months.
Camera IconRent will continue to go up in 20 regions across Australia. Credit: istock
These areas include major capital cities like Brisbane, Adelaide, Perth, Hobart, and Canberra.
The vacancy rate in Greater Brisbane has been falling over the past five years and is currently sitting at 0.8 percent.
This has subsequently caused Brisbane’s average rental price to increase by 11.9 percent over the past year while the new house supply remains low.
Vacancy rates in Greater Adelaide and Perth sit at 0.3 and 0.5 percent, respectively, with rental prices increasing by 11.3 and 12.5 percent in the past year.
Hobart’s vacancy rate is the lowest among Australia’s capital cities at just 0.2 percent.
This has led to a 9.9 percent increase in rent over the past year and a massive 56.3 percent rise over the past decade.
Camera IconHobart’s vacancy rate is the lowest among Australian capital cities. Sam Rosewarne Credit: News Corp Australia
Canberra’s 0.5 percent vacancy rate has caused rental prices to increase by 12.1 percent over the past year, with the city’s population growth of 17 percent over the last ten years ensuring it will continue to go up.
While the report found that sub-regions in Sydney and Melbourne had strong rental conditions, these cities were not as bad overall as other markets in Australia.
The remaining 15 areas where rental princes will surge are:
Tasmania – Devonport and Burnie-Ulverstone;
Queensland – Nerang, Bundaberg, Maryborough, Buderim, Toowoomba;
ACT/NSW – Queanbeyan, Lake Macquarie East, Kiama-Shellharbour, Wagga Wagga;
South Australia – Barossa and Yorke Peninsula;
Victoria – Warrnambool and Shepparton.
Camera IconThe 20 areas across Australia where rents will continue to surge. InvestorKit Credit: Supplied
Head of Research at InvestorKit, Arjun Paliwal, said the increasing rental prices in these areas indicate their low vacancy rates.
“Vacancy rates often define a rental crisis at 1 percent or lower, so it’s concerning to see this continuing to worsen,” he said.
We’re currently at 0.7 percent – 41 percent lower than 12 months ago, when we were at 1.2 percent.
“Most of the 20 regions chosen in our report have vacancy rates lower than the national average, and the majority are even lower than 0.3 percent.”
Mr. Paliwal said numerous factors are behind the current rental crisis Australia is experiencing.
“These record-low vacancy rates are due to increasing demand and limited supply, caused by factors including greater housing demand, particularly for detached houses due to the work-from-home trend and desire for a better lifestyle,” he said.
“The recent housing boom and prices are forcing people to stay in the rental market longer, more Gen Ys are moving out of home, there has been strong population growth in regional areas and a fall in property investor activity over recent years.”
