If you’re a renter in Australia, things are about to get worse. The head of the National Housing Finance and Investment Corporation has warned that the rental shortage could tighten more than expected at the start of the new year. This is due to an increase in borrowing costs which is reducing new housing supply & construction and a pick-up in overseas migration which is increasing demand.
The news comes as rental listings nationwide have already slumped to record lows – something that is being caused by more landlords returning their properties to the higher-yielding short-stay market. So not only are rents surging but there are also fewer apartments available to rent.
It’s a grim situation for renters who are already struggling to find affordable accommodation. Let’s take a closer look at what’s causing this rental crisis and what it means for those who are looking for a place to call home.
What’s causing the Rental Crisis?
There are a few different factors that are contributing to the current rental crisis in Australia. Firstly, interest rates have started to increase after years of being at record lows. This is beginning to curb the new housing supply as potential investors are put off by higher mortgage repayments.
At the same time, we’re seeing a pick-up in interstate migration which is further boosting the demand for rental properties in certain cities and regions throughout Australia such as the Gold Coast. According to recent data from the Australian Bureau of Statistics, Queensland had the highest net gain from interstate migration of 25,300 people.
Add all of this to the fact that more landlords are taking their properties off the long-term rental market and putting them into the higher-yielding short-stay market, and it’s no wonder that there is such a shortage of rentals available at an affordable price.
What does this mean for Renters?
If you’re currently renting or you’re looking for a rental property, then you know just how difficult it is to find something that meets your needs and your budget. The situation is only going to get worse as we head into 2023, with rents expected to continue rising and fewer properties available for rent. Some critical items to keep an eye on:
- If you can’t afford your rent, start looking for cheaper accommodation now.
- If you’re planning on renting in 2023 and beyond, start your search early and be prepared to compromise on your wishlist items.
- Keep an eye on interest rates – if they continue to rise, it will only make finding affordable accommodation even more difficult.
What can you do to avoid this?
It’s no secret that renting in Australia is becoming increasingly difficult and expensive. With interest rates on the rise and fewer properties available for rent, 2023 is shaping up to be a tough year for renters.
You can, however, look to the next steps into owning your own home and getting out of the rental cycle by taking advantage of the federal government’s First Home Loan Deposit Scheme.
If you’ve been looking for a home of your own but don’t have the deposit, Enigma Home Group may also be able to help. We provide a comprehensive property solution to everyday Australians without the need for a deposit – Take our eligibility quiz to see if you qualify for a no-deposit home loan
