Rate rises deepen rental crunch

The rental crisis affecting regional Victorians shows no sign of easing as the impact of 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 living in regional areas 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 real housing solutions – has analysed and ranked rental data from SQM.

The five regions impacted most by the state’s rental crisis show rental vacancy rates well below 1 per cent at the same time rents have increased by 6-14 per cent.

 

Everybody’s Home spokesperson Kate Colvin said 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 capitalize on historically low vacancy rates to shift the rising cost of interest rates on to their tenants. While the Victorian 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 said a decade of inaction on social and affordable housing from the previous federal government had led to a perfect storm.
“There are limited options for people who can’t afford to buy but want to stay in their local community. 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, Geelong’s median rent has jumped from $450 to $500 per week in recent months with many properties at a premium to this as demand overruns supply.

Bendigo, which has seen over a 60 per cent rise in property prices in the last two years has seen rent jump from $330 to $400 per week.
Ballarat has seen the median house price jump by more than $170,000 in less than two years with the median rent increasing to $380 per week.

On the coast, rent is just up for grabs and medians are rarely the benchmark as vendors with good properties located near the beach hold all the cards.

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