Home Insights Renters Warned To Brace For Price Hikes As Supply Shortages Hit

Renters Warned To Brace For Price Hikes As Supply Shortages Hit

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Rental prices are expected to reach new highs in 2022 as a serious shortage of quality accommodation intensifies competition among prospective tenants.

Throughout Australia, the total supply of rentable properties has been declining since mid-2020.

As fewer properties are on the market, competition between tenants is intensifying and rents are under upward pressure.

Throughout the Australian capital, the median cost of renting real estate has increased by 6.7% over the last 12 months, or $ 1,500 a year. Growth in the region is even more pronounced, with rents rising 8.5%, or $ 1,600 a year.

Rental stress is becoming more and more a concern for many

The Australian Government defines rental stress as a situation where tenants spend more than 30% of their total income on renting.

As of August 2021, the median weekly income of Australian employees was $ 1200, according to the Australian Bureau of Statistics. Applying the 30% rule to this number would make single-person households paying more than $ 360 a week considered stressed.

And as rents continue to rise faster than real wages, the number of affordable rental properties is declining.

Already, the median unit rent is over $ 360 in all states and territories except South Australia.

In addition, rents appear to grow even stronger in 2022.

The availability of rental housing is low, and demand is expected to surge until 2022, putting upward pressure on prices.Photo: Getty

The average number of views per rental property hit a new high in January.

For all rental properties, the number of views the property receives provides a useful measure of interest and a gauge for predicting demand.

If the property supply is low compared to the number you are considering renting, you expect more views per list. This was the case in the first month of the year.

The average number of views of properties listed for rent in January reached a record high, demonstrating a growing imbalance between supply and demand.

This trend was seen throughout Australia, with six of the eight states and territories setting new records in January.

Areas with the highest demand from lessees

Throughout the eastern states of Australia, the region is the most fiercely contested.

In New South Wales, rental properties in the Irawara region are the most interesting, with the average property generating 165% more views compared to the rest of the state.

In Victoria, the Mornington Peninsula has the highest rental demand, with 98% more views of the property compared to the state average.

The Gold Coast is Queensland’s most watched area, with rental properties averaging 98% more views.

The capital still holds the highest position in other states and territories, with the most demanding regions northwest of Perth, south of Adelaide, Hobart and Darwin.

What’s next to rent?

Population growth is a major driver of rental demand.

The fact that rent supplies have been declining over the last two years in the absence of international migration is particularly concerned about the reopening of borders.

The revival of international tourism may also reduce supply.

After the Australian border was closed in 2020, many short vacation properties were added to the “traditional” market.

Over time, as tourism recovers, many of these properties are likely to return, which will further reduce supply.

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