Newcomb, Moolap among state’s worst for rental pain

THE Geelong suburbs of Newcomb and Moolap are collectively the third-hardest places in the state to find a cheap place to rent, according to new data from Suburbtrends.

The real estate analytics firm has released its latest Rental Pain Index, which tracks rental affordability across Australia, for September.

A composite metric, the Rental Pain Index is devised to provide a quantifiable measure of the challenges faced by renters in a given real estate market.

It is scored on a scale of 1 to 100, where a score of 100 denotes the most unfavourable conditions for renters, and a score of 1 signifies optimal conditions.

September’s report reveals the suburb group of Newcomb and Moolap has a Rental Pain Index of 94, behind only Wheelers Hill (ranked first with 96) and Warrnambool – South (ranked second with 96) in Victoria.

Suburbtrends calcuates a suburb’s Rental Pain Index based on five factors:

• Rent Change Score, which captures the annual percentage change in rents, with a score of 100 assigned for a 5 per cent or greater increase in rent.
• Advertised Rentals Score, which represents the percentage of advertised rentals in the market, with a percentage below 5 per cent indicating fewer choices
• Vacancy Score, which measures vacancy rates, with a score of 100 given for rates below 1 per cent
• Vacancy Change Score for the for the three-month change in vacancy rates, with a decrease of 0.5 per cent or more scoring 100, indicating a tightening market, and
• Rent Affordability Score, which measures the percentage of household income allocated to rent, with more than 35 per cent scoring 100, indicating unaffordability.

In Newcomb and Moolap, average rents increased by 5 per cent over the past 12 months, with 33 per cent of income needed to rent a property and a vacancy rate of just 0.42 per cent.

This aligns closely with a prediction made by Westpac chief economist Bill Evans last month, when he said rental vacancies had tightened quickly across Australia over the past 12 months and might now be less than 1 per cent in Geelong.

The full September report shows eight Australian suburbs have a Rental Pain Index of 100 – Christie Downs in southern Adelaide tops the list – and another six have indexes of 99.

“The Rental Pain Index for September 2023 unveils a disturbing reality,” Kent Lardner from Suburbtrends said.

“Areas such as Christie Downs in South Australia and Ashcroft-Busby-Miller in NSW are experiencing soaring rental increases of 10 per cent, while renters allocate 41 per cent of their income to afford a roof over their heads.”

Suburbtrends describes the market as “increasingly hostile for renters”, with vacancy rates below 1 per cent in all but one of the suburbs in the top 25 places on the index.

“Vacancy rates under 1 per cent in most of these suburbs show the immense strain on housing availability,” Mr Lardner said.

“When you’re allocating nearly half your income on rent, as seen in Bass Hill-Georges Hall, the financial stress becomes unbearable.”

“Our index is more than just numbers; it’s a call to action. Policymakers and stakeholders need to acknowledge this growing crisis.

The relentless climb in rent and plummeting vacancy rates are not just statistics but indicators of a quality of life that is rapidly deteriorating for Australian renters.”