Rental prices have increased dramatically right across the nation due to record low vacancy rates. Capital city rents have risen by 11.8% over the past 12 months and rose by 2.2% in just the last month, according to SQM Research.
Louis Christopher, SQM Research managing director said that “The magnitude of rental increases across the country is unprecedented. I’ve never seen such sweeping rental increases nationwide, ever.”
The main causes have been attributed to the growing number of tenants living on their own and the return of international students. Combined, this is fuelling strong rental demand at a time when the supply is diminishing rapidly.
Christopher stated that adding to this issue is the fact that, “Some landlords have taken their rental properties off the market for their personal use during the pandemic, and many have not returned into the market.”
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Mr Christopher said that this crisis will influence the RBA’s decision when it comes to interest rates. “This is a cost-of-living issue, and it’s going to feed through into inflation reading eventually. That’s why we’ve been jumping up and down saying ‘Watch out for the inflation rate’ because rents and housing costs make up a quarter of the CPI reading, so I expect the number is going to be big when it comes out because of these steep rises in rents. But even more worrying is the social ramifications. I think we’re going to see a rise in homelessness as a result. But the political parties have not come up with policies to address this.”