CoreLogic has released rental data for December 2022, which shows that rents nationally soared by 10.2% in the 2022 calendar year amid the tightest vacancy rates on record.
CoreLogic explains that “while housing values have been influenced by interest rates, rental market conditions have been more closely linked to demographic trends through COVID”.
Specifically, “fewer people per household through the pandemic, and more recently the strong return in overseas migration, has added substantially to rental demand”.
This “strong return in overseas migration” is occurring “alongside record low vacancy rates. The combined capitals rental vacancy rates finished the year at 1.2%, ranging from 0.4% in Adelaide to 1.8% across Darwin”.
Source: CoreLogic
Accordingly, CoreLogic expects that “over the coming year, high rental demand is most likely to be concentrated in Sydney and Melbourne, which have historically accounted for around two-thirds of overseas migrant arrivals”.
In turn, unit rental growth is now exceeding houses, with “annual growth in unit rental values reaching 14.1% this year compared with a 9.5% rise in house rents”.
“As renters face worsening affordability pressures, it’s logical to expect more rental demand to transition towards higher density options, where rents are generally more affordable, or for rental households to maximise the number of tenants in a rental dwelling”.
As we know, the Albanese Government has committed to the largest temporary and permanent migration program in Australia’s history, which has already seen annual immigration return to its manic pre-pandemic level:
Immigration rebounding fast.
Where will the hundreds of thousands of migrants landing this year live when there is already an extreme shortage of rental accommodation? In tents?
The only outcome from the Albanese Government’s ‘Big Australia’ policy is soaring rents, chronic rental stress and homelessness.
It is an inequality disaster in the making.
