Australia’s rental crisis continues to deepen, with CoreLogic reporting extreme rental growth across the major capital cities, especially across the apartment market:
In Sydney, the annual growth rate for units (18.1%) is now nearly twice as high as the annual growth rate for houses (9.4%).
Each of the capital cities is experiencing a similar pattern, with unit rents increasing noticeably more quickly than house rents.
In Sydney (5.3%) and Melbourne (4.3%), the quarterly increase in unit rents over the March quarter was at an all-time high, according to CoreLogic.
Since the pandemic began in March 2020, capital city house rents have increased by 24.8%, while apartment rents have risen by 19.5%, though they are catching up fast.
Commenting on the results, CoreLogic’s head of research, Tim Lawless, noted there is likely to be two factors at play driving up apartment rents.
“With growth in house rents previously much stronger through the worst of the pandemic, it’s likely more and more tenants have no choice but to seek out more affordable options in the medium to high density sector”, noted Lawless.
“Additionally, the surge in overseas migrants and students is likely to be funneling demand in inner city areas and precincts close to universities, transport and amenity hubs”.
“As rental affordability becomes more pressing we are likely to see group households reforming, reversing the trend towards smaller households seen through the pandemic”, Lawless added.
“Additionally, tenants are likely to be maximising their tenancy, sacrificing the spare room or home office to spread rental costs across a larger number of tenants”.
“CoreLogic data has also shown a continued lift in rental hold periods, suggesting tenants may have a preference for holding onto their existing lease, rather than braving the search for a new rental”.
Australia’s population ballooned by nearly 500,000 in 2022 (a record high) on the back of extreme net overseas migration of nearly 400,000 (also a record high):
Monthly visa data to February 2023 is also showing explosive growth, driven by overseas students, which suggests net overseas migration will be even higher this year:
The upshot is that Australia’s rental market will continue to tighten, leading to strong rental inflation and increasing homelessness.
It is an inequality disaster in the making brought about by the Albanese Government deliberately engineering the biggest immigration program in this nation’s history.
It also highlights why Labor’s Housing Affordability Future Fund, which aims to build 30,000 social homes over five years, is laughably inadequate given at least 1.2 million net overseas migrants will arrive over that same time period.
