Rate rises deepen rental crunch

The rental crisis impacting regional Victorian’s shows no sign of easing as the fallout from escalating property prices and rate rises plays out in the rental market.

Some regional markets have seen property prices nearly double in two years with landlords seeking returns that reflect their investment and rising interest rates.

A new analysis of rental vacancies rates in regional Victoria shows tenants across the state are most vulnerable to rent increases, as landlords look to recoup the cost of rising interest rates.

Everybody’s Home – the national campaign for housing solutions – has analysed and ranked rental data from SQM Research.

The five regions impacted most by the state’s rental crisis show rental vacancy rates well below one per cent at the same time rents have increased between six to 14 per cent.

Everybody’s Home spokesperson, Kate Colvin, said that as mortgage interest rates doubled many landlords would seek to pass the cost on to tenants.

“Renters are in for a seriously difficult time as landlords capitalise on historically low vacancy rates to shift the rising cost of interest rates on to their tenants,” she said.

“While the Victorian State Government has invested in social housing, we will only start to see significant change once we see a significant promise from the Federal Government as well.”

Ms Colvin says that after a decade of inaction on social and affordable housing from the previous Commonwealth Government we really are in a perfect storm.

“There are limited options for people who can’t afford to buy but want to stay in their local community,” she said.

“Just because you rent, doesn’t mean you haven’t established deep roots in a community.

“Renters on low and modest incomes work in the local shops and aged care services.

“They have kids in local schools, are members of sports clubs, and attend local churches, they deserve the same stability as everyone else.

According to CoreLogic, Bendigo has seen an over a 60 per cent rise in property prices in the last two years, with average rents jumping from $330 to $400 per week.

Ballarat has seen the median house price increase by over $170,000 in less than two years with the median rent up to $380 per week.

Meanwhile, Geelong’s average rent has jumped from $450 to $500 per week in recent months, with many properties at a premium as demand overruns supply.

Everybody’s Home say that we all need to start planning for more social and affordable houses now, and with a dip in construction starts forecast for next year, provides a great opportunity for governments to swing in and take up the slack in the industry.