There has been much commentary on rental affordability in recent times, mostly from the point of view of tenants who feel the daily pain of trying to balance a budget in the face of rising rates.<\/p>\n
Some industry experts are concerned that negative commentary on the rental crisis is unfairly aimed at landlords and investors, painting them as the bad guys.<\/p>\n
A spokesperson for Property Investment Professionals of Australia point out that not all investors are big players, and that many landlords are mum and dad investors with one property.<\/p>\n
PIPA research shows that 71 per cent of investors own one property, and 90 per cent own just two, contrary to popular opinion about a plethora of mega-rich people who seemingly own dozens of properties.<\/p>\n
Further industry research has found that rents have grown at only half the rate of inflation for more than a decade, even after allowing for the past year\u2019s rent increases and the current inflation spikes.<\/p>\n
Industry experts are concerned that ongoing anti-investor sentiment is set to deepen the rental crisis.<\/p>\n
PIPA and the Property Investors Council of Australia have joined forces to highlight the financial reality for millions of property investors in the face of sharply rising ownership costs.<\/p>\n
The research, which uses the Australian Bureau of Statistics Consumer Price Index from June 2012 to June 2022 and put together by property academic Peter Koulizos, found that rents increased by just 11 per cent nationally over the decade, but inflation rose by 25.6 per cent over the same period, a shortfall of nearly 15 per cent.<\/p>\n
On an annual basis, rents increased by about one per cent per year, versus average inflation increasing at more than two per cent each year over the decade.<\/p>\n
Mr Koulizos also analysed results at a capital city level, which found that rents didn\u2019t keep up with inflation in every capital city apart from Hobart over the period.<\/p>\n
\u201cThese results clearly show that rental growth has been below inflation for more than a decade, even with the recent spurt of rental price pressure,\u201d he said.<\/p>\n
\u201cAs well as their cash flow taking a hit because of this income versus inflation imbalance, investors have also had to finance a huge variety of additional costs levied by all levels of government over the past decade.<\/p>\n
\u201cGovernments deserted the supply of affordable rental properties years ago, expecting private investors to simply take over this responsibility, however more and more investors are deciding that it\u2019s just not worth it.\u201d<\/p>\n
The analysis also found that the rents in Sydney are at the same level as 2016, with Melbourne posting rent at the same level as 2018.<\/p>\n
PIPA chair Nicola McDougall said the volume of investors in the market was below historical averages for half of the research period as well, predominantly due to lending restrictions and yet rents remained well below inflation.<\/p>\n
\u201cThe lending restrictions in 2017 unfairly targeted investors, with many unable to transact for a number of years,\u201d she said.<\/p>\n
\u201cFrom that period of on, the supply of rental properties started to dwindle because investors simply couldn\u2019t qualify for finance, but this research shows that rents have not kept up with inflation.<\/p>\n
\u201cSince the start of the pandemic, investors were initially asked to \u2018take one for the team\u2019 and supply free or low-cost housing to their tenants; are continually expected to pay higher costs for everything property-related from council rates to stamp duty; and will soon be \u2018double-taxed\u2019 by the Queensland Government.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
There has been much commentary on rental affordability in recent times, mostly from the point of view of tenants who feel the daily pain of trying to balance a budget in the face of rising rates. Some industry experts are concerned that negative commentary on the rental crisis is unfairly aimed at landlords and investors, […]<\/p>\n