Australia’s rental crisis has gone from bad to worse, with CoreLogic’s Quarterly Rental Review showing that rental growth accelerated to 2.5% nationally over the March quarter, up from 2.0% over the December quarter.
Sydney and Melbourne units were the primary driver of the quarter’s rental growth, climbing by 5.3% and 4.3% respectively.
Annual rental growth also remained red hot at 10.1%, with double-digit rises recorded across each of the major capital cities.
The strongest net overseas migration on record and a shortage in rental listings caused the national vacancy rate to tighten further to a new record low of 1.0% in February and 1.1% in March, down from 1.3% in December.
Vacancy rates are tighter across the combined capital cities (0.9%) than the combined regions (1.4%), reflecting the fact that overseas migrants tend to land in the capitals.
“The uptick in rental growth can largely be attributed to surging unit rents, particularly across the largest capitals, with increased overseas migration and a return of foreign students pushing rental demand higher”, notes CoreLogic.
Sadly, CoreLogic sees no end in sight to renters’ suffering “given the imbalance between supply and demand”.
“Net migration is likely to remain strong for some time yet, adding to rental demand and placing additional upwards pressure on rental values”, notes CoreLogic.
This view is shared by the National Housing Finance & Investment Corporation (NHFIC), whose latest report forecasts that demand will exceed supply by 124,100 dwellings over the five years to 2028:
“Returning migration at a time of low vacancy rates is likely to result in upward pressure on rents”, NHFIC notes in its report.
In particular, “rents are picking up strongly in the cities that receive the bulk of overseas workers and international students, such as Sydney and Melbourne”.
Therefore, the rental crisis will remain as long as the Albanese Government maintains its extreme immigration policy.
