We’ve just been through the biggest rent rise in 14 years in Australia, and the competition for rental properties shows no signs of abating. In fact, in Brisbane rental properties listed on realestate.com.au have hit a record low of 15 days of being on the site before being rented out. It’s a similar situation in all the major capital cities around the corner.
Unfortunately, this pressure on rental properties shows no signs of easing. Life is returning to pre-pandemic status with businesses functioning as usual and international migration resuming. People need places to live and demand is easily outstripping supply, making it harder and harder for tenants to secure a rental.
There’s one interesting factor that’s only going to make things harder too…
International Students Bring More Heat to Rental Market
Australia’s position as a global leader in international education means the international students weren’t going to stay away forever. With the borders opening up again, they’re back in a big way.
In fact, in an update sent to education providers the Home Affairs Department stated, “this is the largest number of offshore applications received in a single month in the last 10 years”.
Considering the number of international students has been steadily increasing over the years, we’re looking at the biggest arrival of foreign students on our shores, ever. There has been over 10,000 visa applications a week, which is up almost 40% since pre-covid days. This is going to tax our already tight rental supplies, as most students arriving will be looking to rent rather than buy.
Renters Turn to Share House Living
The demand for rentals covers all sectors, from standalone houses to inner city units. There’s also been a big surge in share house living seekers, something that had fallen away during the days of extended lockdowns.
According to Claudia Conley, community manager at flatmates.com.au, the website had over 37,000 new members join in one month. That’s an increase of 65% on the same time period last year. This is a direct indication of the effects of soaring rental prices, with tenants opting to share rentals and the associated costs rather than bear them singlehandedly.
Unfortunately, most of these new additions to the website are seeking properties, rather than offering properties for rent. The number of properties for rent has actually gone down by 11% over the last year. It seems competition for people seeking a room to rent is only going to increase, and share housing is unlikely to solve the rental crisis.
No Quick Fix in Sight
Atlas Property Group director and buyer’s agent Lachlan Vidler has said that there is no easy remedy in sight for the rental problem. Investors are not going to come in and save the day, with “One of the major reasons why our rental market is so severely undersupplied is also because a huge number of investors sold their properties to owner-occupiers last year.”
They did this to take advantage of record high house prices, and many also didn’t want to risk providing homes for tenants during the pandemic without receiving any compensation. Whatever their reasons, many investment properties became owner-occupied properties in that time.
Today, thanks to increasing interest rates, property investment statistics are far off from where they need to be in order to solve the rental crisis.
Historically, we can put faith in our Australian property market. It’s a resilient sector, and it has always recovered when it hits troughs. So while there isn’t a quick fix, we will get through this rental crisis.
If you’d like to chat with The Henry Wong Team® about real estate in Brisbane and how prices might be affected by the rental demands, please get in touch. Henry is here to answer all your questions.